US Accounts For 26% Of India's Auto Component Exports In FY26: ACMA

New Delhi, Jul 8 (KNN) The United States remained the largest export market for Indian auto components in FY26, accounting for 26 percent of total overseas shipments, despite ongoing trade tensions and a US investigation into the sector, according to the Automotive Component Manufacturers Association (ACMA).

US Retains Position as Top Export Market

India's auto component exports grew 5 percent year-on-year to USD 24 billion in FY26. Germany and Thailand were the second and third largest export destinations, accounting for 9 percent and 4 percent of exports, respectively.

The export performance comes amid a Section 301 investigation by the Office of the United States Trade Representative (USTR) into alleged unfair trade practices by 16 countries, including India.

The probe is examining issues related to labour practices and government-backed industrial overcapacity, with further hearings scheduled later this month, reported Economic Times.

ACMA Rejects USTR Allegations

Responding to the allegations, ACMA Director General Vinnie Mehta said the Indian auto component industry does not suffer from excess capacity or benefit from significant government subsidies.

He noted that only two of ACMA's nearly 1,100 member companies have received benefits under the Production Linked Incentive (PLI) scheme.

Mehta also rejected allegations of unfair labour practices, stating that the sector is highly organised, complies with India's labour laws and does not employ child labour.

According to ACMA, nearly half of India's auto component exports to the US currently attract a 25 percent tariff, while the remaining exports face a 12.5 percent duty.

Components attracting the lower tariff are part of the ongoing USTR investigation.

India Emerges as Alternative Sourcing Hub

Mehta said several Indian auto component manufacturers have recently received requests for quotations from US companies seeking to diversify supply chains away from China.

He added that these requests specifically require suppliers to confirm that their operations are not dependent on Chinese supply chains, reflecting growing confidence in India as a sourcing destination.

Industry Eyes Strong Growth Despite Trade Deficit

Looking ahead, ACMA expects the Indian auto component industry to grow by 8-10 percent in FY27, supported by strong export demand and continued domestic market growth.

The industry recorded revenues of Rs 7.59 lakh crore (USD 85.9 billion) in FY26, representing a 12.7 percent increase in rupee terms. However, it also reported a trade deficit of USD 1.4 billion for the first time in two years, as imports outpaced exports.

China remained the largest source of India's auto component imports, accounting for 36 percent of total inbound shipments.

ACMA President Vikrampati Singhania said the sector's medium- to long-term outlook remains positive, driven by rising domestic demand, infrastructure-led economic growth, manufacturing investments, expanding free trade agreements and increasing global sourcing from India.

(KNN Bureau)