The auto component industry is looking at the easing of tensions with China as a chance to strengthen partnerships and access advanced technology. China remains India’s largest source of component imports, and industry leaders said that improvement in ties could support growth in the domestic sector.
“Many Indian firms have already partnered with Chinese companies, and as relations improve, more collaborations are likely. We must engage strategically, ensuring our interests are protected while leveraging global opportunities,” Vinnie Mehta, director general of the Automotive Component Manufacturers Association of India (ACMA), said at the 65th Annual Convention of ACMA.
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China accounts for 32% of India’s $22.4 billion in auto component imports, covering electronics, sensors, and metal parts. The domestic industry is valued at over $80 billion in 2025 and is expected to double by 2030, according to ACMA.
Balancing opportunities with China and challenges with the US
The industry is also dealing with the impact of higher US tariffs on Indian exports. Of the $22 billion in total exports, $6.6 billion goes to the US. According to ACMA’s estimate, $3.08 billion of these shipments, or nearly 47%, will now attract a 50% tariff — 25% base duty plus an additional 25% — under the Reciprocal Tariff Order EO 14257. The order was issued on April 2, 2025, and amended for India in August. The remaining $3.58 billion in exports will continue to face a 25% tariff under Proclamation 10908, effective March 26, 2025.
Vikrampati Singhania, managing director of JK Fenner (India) and ACMA president-designate, said the situation should be viewed in context. “This is likely a transitional phase, and the issue should be resolved soon. Only half of our US exports still attract 25% duty,” he said.
Strategic responses to a changing global landscape
Mehta added that lowering GST would help strengthen the domestic market, offsetting some of the tariff impact. While no visible effect was seen in the first quarter, he said it may show up in second-quarter numbers yet to be released.
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Despite these challenges, industry projections remain optimistic. A joint report by ACMA and McKinsey said India’s auto component exports could reach $70 billion–$100 billion by FY30.
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