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India is building the auto world’s Plan B to China

By Sohail Khan 17 September 2026, 2:21 pm

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Business News›Industry›Auto›Auto Components›Tariffs, supply risks push Indian auto parts makers to build beyond China

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Tariffs, supply risks push Indian auto parts makers to build beyond China
Synopsis

Indian auto parts makers are expanding global manufacturing and engineering capabilities. This shift addresses automakers' needs for diversified sourcing strategies and supply chain flexibility. Companies are developing products in one location and manufacturing them across multiple sites. This strategy hedges against trade uncertainties and supply chain disruptions effectively. Indian suppliers are becoming strategic partners in the restructured global automotive supply chain.

Mumbai: Indian auto parts makers are expanding their manufacturing presence overseas and building advanced engineering capabilities to capitalise on global automakers shifting their sourcing strategies away from single-country production hubs towards suppliers that can design components in one location and manufacture them across multiple sites globally.

This transition is being driven by trade uncertainties, unpredictable tariffs and supply chain disruptions.

Also Read: China's car glut has long flooded the world. Now comes the cleanup

The trend is accelerating across major Tier-1 suppliers, including Suprajit Engineering, Highway Roop Precision Technologies, SPR Auto Technologies and Tenneco, as OEMs prioritise supply chain flexibility over single-country dependence.

“Global OEMs (original equipment manufacturers) are looking for a diversified footprint where you can develop the product in one location and then supply from multiple locations,” Ajit Rai, chief strategy officer at Suprajit Engineering, told ET.

Bengaluru-based Suprajit, a manufacturer of control cables and mechanical and electronic parts, operates plants across India, China, Mexico, Hungary and Morocco. This distributed setup enables global clients to shift order volumes seamlessly to hedge against tariff swings.

“Whatever learnings we have had in China, we can deploy in Mexico, Hungary or Morocco,” Rai said, highlighting that if trade barriers make one region uncompetitive, production can be reallocated elsewhere without switching suppliers.

This evolving “China+1” dynamic is backed by data from a joint BCG-ACMA report, which forecast India’s auto parts exports to surge to $45 billion by the turn of the decade from $24 billion in FY26. While India currently accounts for less than 5% of global auto parts trade compared with China’s 12%, Indian suppliers are rapidly closing the gap as product technology reaches global standards.

Tenneco highlighted that technological equalisation has made India-engineered parts directly comparable with European products. “Because of technology equalisation, products developed and supplied from India are now at the same tech level as those sold in Europe,” said Arvind Chandra, CEO of Tenneco, noting strong demand from European automakers seeking to diversify their supply lines away from China.

At the same time, Indian suppliers are taking on greater design responsibility to cement global partnerships.

Also Read: From India to Vietnam: Why some firms are rethinking the China-plus-one strategy

Highway Roop, which derives 55% of its ₹2,500 crore annual revenue from exports, is transitioning from build-to-print manufacturing to proprietary product design and sub-assemblies. “OEMs increasingly want their Tier-1 suppliers to handle more engineering because their own internal resources are stretched across new technologies,” the company said.

Similarly, SPR Auto is expanding across sub-assemblies and multiple powertrains, including hybrid, hydrogen, CNG and electric platforms, reducing its legacy internal combustion engine business to under 35% of revenue.

“We are already doing a lot of sub-assemblies,” said Krishnakumar Srinivasan, MD & CEO of SPR Auto, highlighting a recent order win to supply full floor console assemblies. “We now have over 14 plants in the country and eight assembly centres.”

By offering multi-country manufacturing flexibility alongside full-service design capabilities, Indian companies are positioning themselves not just as low-cost alternatives to China, but as strategic partners in the restructured global automotive supply chain.

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