The domestic auto component industry grew 6.8% year-on-year to $41.2 billion during the April–September period of FY26, according to industry body Automotive Component Manufacturers Association of India (ACMA).
However, the trade balance came under pressure as imports rose faster than exports. Imports increased 11.5% to $12.3 billion, outpacing a 9.3% rise in exports to $12.1 billion, resulting in a trade deficit of around $200 million.
Exports were impacted mainly by weaker shipments to the US, where automakers deferred fresh orders from Indian suppliers following the imposition of steep tariffs by US President Donald Trump last year. At the same time, component imports from China rose sharply amid restrictions on the export of key raw materials, further widening the gap.
“All are aware of the headwind that we have in exports. Yet, the exports did well. But this time, there has been a bad trade deficit compared to the trade surplus that we had last year,” Vinnie Mehta, Director General, ACMA said.
The industry had recorded a trade surplus of $150 million in the year-ago period (H1 FY25), while the full financial year 2025 ended with a surplus of $453 million.
Regional Export Trends
While exports to major regions such as Europe, Africa and Asia registered robust growth, shipments to North America remained largely flat at $3.67 billion, reflecting the impact of additional tariffs imposed by the US.
“I must qualify here that in the first six months, the supply to the US has remained the same. It’s been very steady. And that’s because the impact of Trump tariffs would be felt more in the second half than in the first half,” Mehta said.
Exports to North America declined marginally by $30 million during the period, while imports from the Asia region surged by $1.1 billion. Data showed that India’s component exports to the US stood at $3.12 billion in April–September 2025, compared with $3.10 billion in the year-ago period. Imports from China, meanwhile, rose to $4.05 billion from $3.27 billion.
Auto components shipped from India to the US are now subject to a flat 25% tariff. About 55% of India’s auto component exports to the US—mainly car parts—were earlier covered under Section 232 tariffs, while commercial vehicle and off-highway parts faced additional reciprocal tariffs that pushed duties as high as 50% in some cases.
A clarification issued on November 1 rolled back these higher rates, bringing all categories under a uniform 25% tariff, Mehta said.
What did ACMA President say?
ACMA President Vikrampati Singhania noted that while existing supply chains remain intact, new contracts from the US are currently on hold.
“Tariffs imposed by the US on much of the world and India have led to a lot of hesitation from companies in the US and the NAFTA region to source new projects from companies in India. While immediate trade may not take a very big hit, the numbers you saw (exports to North America) were relatively flat, but 10% growth in the rest of the world,” he said.
ACMA officials also pointed out that some countries have secured more favourable tariff rates under the Section 232 regime, placing Indian suppliers at a disadvantage.
Even a 10 percentage point difference in tariffs can significantly impact trade flows, given the thin margins in the auto component business, said Sriram Viji, ACMA president designate.
“So, unless we see either some resolution on this front, or at least stability and clarity on where things are going, I think there will be some challenges going forward with respect to trade, specifically with respect to the US. Other markets are reviving. Europe is going slightly better this financial year, so I think we are seeing some positive demand on exports there,” he added.