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The impact of US tariffs on India’s auto parts industries will likely be felt in the second half of the current financial year, while uncertainty remains over new contracts. Auto parts industries body ECMA made this estimate on Wednesday. Automobile Component Manufacturers Association (ACMA) said Indian auto parts industries registered a turnover of Rs 3.56 lakh crore in the April-September half of the financial year 2025-26, a growth of 6.8 percent. This is higher than the turnover of Rs 3.33 lakh crore in the same period a year ago. In the first half, the industry’s exports increased by 9.3 per cent to $ 12.1 billion while imports increased by about 12.5 per cent to $ 12.3 billion. Currently, 25 percent tax is applicable on Indian component products in America. Demand is likely to increase due to seasonal demand and infrastructure-based activities. Reductions on select vehicle categories under the GST framework could have a positive impact on the components environment.
Component exports remained stable in April-September
Indian companies exported auto parts worth $3.64 billion to the US during this period, compared to $3.67 billion in the same period last year. ECMA President-elect Sriram Viji said exports to the US look a bit uncertain going forward and there is uncertainty over new contracts, while existing supply chains will continue for some time. The industry body said export growth in April-September was achieved despite significant global challenges, including supply chain disruptions, raw material cost pressure and weakness in demand in key markets.
India’s growth rate will be 7.2 percent: World Bank
The World Bank has raised India’s GDP growth forecast for the current financial year to 7.2 percent on the back of strong domestic demand and tax reforms. This is 0.9 percent more than its June estimate. The World Bank also said in its major report Global Economic Prospects that India’s growth rate may slow down to 6.5 percent in the year 2026-27. This estimate is based on the assumption that 50 percent US import duty will remain in force during this period. India is expected to maintain the fastest growth rate among the world’s major economies. The World Bank said there is no change in its growth forecast from June projections despite higher duties on some exports to the US.
India will remain the fastest growing economy
The growth rate of the Indian economy is estimated to be 7.3 to 7.5 percent in the current financial year and seven percent in 2026-27. Professional services and consulting company Grant Thornton India said this on Wednesday. According to the first advance estimates released by the National Statistical Office (NSO), India’s growth rate is expected to be 7.4 percent in 2025-26, which is more than 6.5 percent in the last financial year, due to the strong performance of service and manufacturing sectors. Thus, India will retain its position as the world’s fastest growing major economy.
