India’s automotive components industry is on track for sustained expansion over the next several years, with Goldman Sachs forecasting a 10% compound annual growth rate (CAGR) in revenue between FY26 and FY30. The investment bank attributes this momentum to the sector’s strategic diversification into high-growth industries, including semiconductors, electric vehicles (EVs), defense, aerospace, and data center infrastructure.
According to the report, Indian manufacturers are rapidly evolving beyond their traditional role in automotive supply chains. Companies are investing in advanced production capabilities such as precision engineering, tooling, and sophisticated machining technologies, enabling them to serve a broader range of industries that demand high-quality manufacturing and specialized components.
Goldman Sachs projects steady revenue growth throughout the forecast period, with the industry expected to expand by 7% in FY27, 12% in FY28, and 10% in FY29. Profitability is also anticipated to improve significantly, with earnings before interest, taxes, depreciation, and amortization (EBITDA) expected to grow at a 15% CAGR during the same timeframe. The report suggests that stronger operational efficiency and increasing participation in high-value manufacturing segments will support these gains.
The analysis also highlights a favorable global environment for Indian manufacturers. As international automotive, industrial, and semiconductor companies continue to diversify their supply chains, India is emerging as an attractive production destination. Competitive manufacturing costs, a highly skilled workforce, and a rapidly expanding domestic market are strengthening the country’s position as a reliable alternative for global companies seeking resilient supply networks.
Goldman Sachs estimates that the industry’s annual revenue will rise from approximately $85.54 billion in FY26 to nearly $124.40 billion by FY30. This substantial increase reflects growing demand for advanced engineering solutions and the industry’s ability to expand into technology-intensive sectors beyond conventional automobile production.
Several structural factors are expected to sustain long-term growth. These include the accelerating adoption of electric vehicles, rising export opportunities, recommendations from the upcoming Eighth Pay Commission that could stimulate consumer demand, and the global realignment of internal combustion engine (ICE) manufacturing. In addition, increasing investments in defense, aerospace, consumer electronics, and semiconductor production are creating new avenues for Indian component manufacturers.
As companies worldwide continue seeking geographically diversified and resilient supply chains, India’s auto components sector is well positioned to capture a larger share of precision engineering and advanced manufacturing contracts. This ongoing transformation is expected to strengthen the country’s manufacturing ecosystem, boost exports, attract fresh investments, and further establish India as a leading global hub for automotive components and high-value engineering solutions.
