India auto-component trade swings to $1.37B deficit as EV and electronics imports rise

India’s auto-component sector moved from a $453 million FY25 surplus to a $1.37 billion FY26 deficit. Imports rose 13% to $25.4 billion, driven by EV batteries, electronics and semiconductors, while China’s share of imports increased to 36% despite a localisation push.

— Source publishedWed, 2 Sept, 2026, 12:45 IST·First seen Wed, 2 Sept, 2026, 12:50 IST·Source BL · Consumer & Economy

What happened

India’s auto-component sector swung to a $1.37 billion FY26 deficit as EV batteries, electronics and semiconductors lifted imports. China’s import share rose to 36%, highlighting supply-chain localisation gaps despite more than 70% domestic sourcing of conventional components.

Key facts

  • FY26 auto-component trade deficit: $1.37 billion
  • FY25 trade surplus: $453 million
  • Turnaround: $1.82 billion
  • FY26 imports: $25.4 billion, up 13%
  • FY26 exports: $24 billion, up 5%
  • China share of imports: 36%, versus 32%
  • Localisation: more than 70%
  • Industry size: about $86 billion; projected $200 billion by FY30
  • India sourced about 85% of rare-earth magnets from China in 2025

Why this matters

The widening deficit strengthens the case for acquisitions, joint ventures and technology partnerships in domestic battery, power-electronics and semiconductor-component manufacturing.

What to watch

  • Monthly import growth in batteries, semiconductors, vehicle electronics and EV powertrain parts.
  • China's share of Indian auto-component imports and any customs, tariff or quality-control changes affecting Chinese-origin supply.
  • Rupee movement against the US dollar and Chinese yuan.
  • New PLI, battery-cell, semiconductor, rare-earth or auto-component localisation announcements.
  • OEM vehicle price increases, EV launch delays, production disruptions or dealer reports of parts shortages.
  • Domestic capacity additions for cells, power electronics, automotive chips and battery materials.
  • Increase sourcing visibility below tier-1 suppliers, especially for battery cells, battery-management systems, inverters, ECUs, sensors and power semiconductors.
  • Secure longer-term contracts and dual-source plans for China-linked electronic components and EV subassemblies.
  • Review retail pricing and promotion elasticity for EVs, premium vehicles, accessories and high-failure-rate electronic replacement parts.
  • Expand domestic supplier development, including financing, quality certification and volume commitments for Indian electronics and component manufacturers.
  • Build aftermarket inventory buffers for imported electronic modules and EV service parts where lead times are volatile.

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