India's auto parts industry to clock 10% annual growth on Semiconductor, Defence, EV push: Goldman Sachs
- IBEF
- July 24, 2026
India's auto components industry is expected to register a 10% compound annual growth rate (CAGR) in revenue between FY26 and FY30, driven by diversification into high-growth sectors such as semiconductors, defence, aerospace, electric vehicles (EVs) and data centres, according to Goldman Sachs. The report noted that Indian manufacturers are undergoing a structural transformation by expanding beyond traditional automotive supply chains and strengthening capabilities in precision machining, tooling and advanced manufacturing. Revenue growth is projected at 7% in FY27, 12% in FY28 and 10% in FY29, while EBITDA is expected to grow at a 15% CAGR over the same period. Global efforts by industrial, automotive and semiconductor companies to diversify supply chains are creating new opportunities for Indian manufacturers, supported by competitive manufacturing costs, a skilled workforce and an expanding domestic market.
Goldman Sachs expects the industry's revenue to increase from Rs. 7.56 lakh crore (US$ 85.54 billion) in FY26 to Rs. 11.87 lakh crore (US$ 124.40 billion) by FY30. The report identified electrification, rising exports, the Eighth Pay Commission, the global shift in internal combustion engine (ICE) manufacturing and expansion into defence, consumer electronics, semiconductors and aerospace as key long-term growth drivers. As global companies increasingly seek resilient and diversified supply chains, Indian auto component manufacturers are well positioned to capture higher-value precision engineering opportunities. The sector's continued diversification is expected to strengthen India's manufacturing ecosystem, enhance export competitiveness, attract investments and reinforce the country's position as a global hub for advanced engineering and automotive component production.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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