India Auto Parts Industry Seen Growing 10% to FY30

The brokerage argued that the conventional view of these companies—as cyclical suppliers with limited pricing power and continuous capital-expenditure needs—understates the expansion of their addressable markets.

Growth between FY26 and FY30 is expected to be supported by several factors: vehicle electrification, the forthcoming Eighth Central Pay Commission, rising exports, the relocation of legacy internal-combustion-engine component production to India, and diversification into defence, consumer durables, electronics, semiconductors and aerospace. Indian manufacturers are also positioned to benefit from relatively lower labour costs, continued competitiveness in conventional ICE components and a comparatively gradual pace of domestic electrification.

Goldman Sachs anticipates that auto-component suppliers will outperform vehicle manufacturers during the next Pay Commission-driven demand cycle. “Suppliers benefit from higher production volumes across multiple original equipment manufacturers rather than depending on the success of individual vehicle models,” the report noted.

Within the end-markets tracked by the brokerage, the “others” category—covering defence, construction and energy—is forecast to expand at a 16 per cent CAGR between FY26 and FY30, making it the fastest-growing segment.

The analysis presents the auto-component sector as transitioning from a predominantly cyclical supplier base to a broader precision-engineering platform with multiple demand drivers beyond traditional automotive production.