India Auto Parts Market at 6.0% CAGR, expected to reach USD 169.6 Billion by 2035

India Auto Parts Market Overview

The India Auto Parts Market is experiencing strong momentum as the automotive industry continues to evolve through digitalization, electrification, and manufacturing advancements. As per MRFR analysis, the India auto parts market size was estimated at USD 89.33 billion in 2024. The market is projected to grow from USD 94.69 billion in 2025 to USD 169.6 billion by 2035, exhibiting a compound annual growth rate (CAGR) of 6.0% during the forecast period (2025-2035). This steady growth highlights the sector's importance to India's industrial economy, with expanding vehicle production, rising aftermarket demand, and policy support fueling long-term opportunities.

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Market Drivers
The growth of the Indian auto parts market is primarily driven by increasing automobile production and the expansion of the vehicle fleet across the country. Rising consumer incomes, urbanization, and improved road infrastructure have significantly boosted the sales of passenger cars, two-wheelers, and commercial vehicles, directly influencing the demand for parts and components.

The aftermarket sector is also a major contributor to market growth. As vehicle ownership rises, so does the need for timely repair, replacement, and maintenance, driving demand for spare parts, tires, lubricants, batteries, and accessories. Online platforms and specialized distributors have made these components more accessible, particularly in Tier II and Tier III cities, enhancing market reach.

Government initiatives are further strengthening the industry's foundation. Policies such as the Production-Linked Incentive (PLI) scheme, the "Make in India" campaign, and the Automotive Mission Plan are promoting localization and export-oriented manufacturing. These efforts are helping India evolve as a global hub for high-quality, cost-efficient auto components. Additionally, the government's focus on electric mobility and stricter emission regulations are encouraging the development of advanced and eco-friendly parts, such as EV batteries, lightweight materials, and hybrid components.
Furthermore, the rise of organized service centers and the growing preference for branded aftermarket parts are creating new revenue streams. Manufacturers and suppliers are increasingly focusing on brand value, customer trust, and warranty-backed parts to gain an edge in the competitive landscape.
Technology Advancement

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Technological innovation is revolutionizing the Indian auto parts industry. With the rapid transition toward electric and connected vehicles, suppliers are investing heavily in research and development to produce smarter, more durable, and efficient components. Electric powertrain systems, sensors, electronic control units (ECUs), and battery management systems are emerging as high-demand product categories.

Automation and digital transformation in manufacturing are improving quality, reducing costs, and increasing scalability. Smart factories equipped with robotics, IoT-enabled machines, and real-time monitoring systems are enabling predictive maintenance, minimizing waste, and ensuring precision production. The adoption of 3D printing for prototype development and small-scale production is also gaining traction, reducing lead times and enhancing flexibility in design.

Digital commerce has also reshaped how automotive parts are distributed and sold. B2B and B2C platforms allow customers to compare, order, and receive components quickly, with greater transparency and reliability. The use of AI-driven algorithms helps suppliers forecast demand, manage inventory efficiently, and tailor offerings based on market trends.
Furthermore, blockchain technology is being implemented to ensure traceability and authenticity of parts, combating the challenge of counterfeit products in the aftermarket segment. Suppliers can now offer verified digital records for every part, building consumer trust and ensuring compliance with quality standards.
The growing integration of advanced driver-assistance systems (ADAS) and telematics has also led to increased demand for sensors, cameras, and connectivity modules, pushing traditional mechanical component manufacturers to adopt electronic and software-based capabilities. This transformation marks a crucial step toward building a technology-driven and globally competitive auto parts ecosystem in India.

Regional Insights
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Regionally, the Indian auto parts industry showcases diverse dynamics across different states and manufacturing clusters. Western and southern India dominate the market, with Maharashtra, Gujarat, Tamil Nadu, and Karnataka emerging as major auto component hubs. These regions benefit from a strong network of automotive OEMs, skilled labor availability, and advanced industrial infrastructure. Chennai, Pune, and Sanand are home to major vehicle manufacturing facilities, which has spurred the establishment of numerous component suppliers nearby.

Northern India, led by Haryana and Uttar Pradesh, is also a growing hub due to proximity to the National Capital Region (NCR), which has become a key market for both OEM supply chains and aftermarket distribution. The eastern part of India is gradually emerging as a growth region, supported by government incentives and improving logistics connectivity.
On the export front, India is strengthening its position in the global auto component supply chain. Indian manufacturers are now exporting to regions like Europe, North America, and Southeast Asia, thanks to improved quality standards, competitive pricing, and a reputation for reliability. The government's push to enhance free trade agreements and develop industrial corridors is expected to further boost export opportunities.
The domestic aftermarket is also witnessing remarkable growth, particularly in rural and semi-urban areas where vehicle ownership is expanding rapidly. E-commerce penetration and growing digital literacy are helping consumers access a wider range of genuine auto parts, bridging the supply gap between urban and rural markets.

Outlook
The India auto parts market stands at the cusp of a new growth phase driven by innovation, policy support, and expanding demand across vehicle categories. As the automotive industry transitions toward electric, connected, and sustainable mobility, the component sector will play a critical role in ensuring this transformation succeeds.
Manufacturers and suppliers that prioritize technology adoption, invest in R&D, and strengthen local manufacturing capabilities will gain a significant competitive edge. The integration of digital supply chains, enhanced export readiness, and continued policy incentives will shape India's emergence as a global powerhouse in the auto parts industry.
With strong domestic demand, export potential, and continuous modernization, the India auto parts market is poised to drive the next decade of automotive growth-solidifying its position as one of the most dynamic sectors in the country's industrial landscape.

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