Precision brass automotive component undergoing dimensional inspection

India Auto Component Localisation: What OEMs Need from Precision Suppliers in 2026

Key takeaway: India’s automotive component industry recorded ₹7.60 lakh crore in turnover in FY2025–26 and is expected to grow another 8–10% in FY2026–27. At the same time, rising imports of electronics and EV components are creating a trade deficit and increasing the importance of deeper localisation. For OEMs and Tier-1 suppliers, this creates an opportunity to develop reliable Indian sources for precision-engineered components.

India’s automotive component industry is entering another important phase.

Demand is growing.

Exports remain significant.

OEM sourcing from Indian suppliers is expanding.

But the industry also faces an important challenge: India still imports a significant amount of advanced automotive and EV components.

That creates an interesting opportunity for precision manufacturers.

The question is no longer simply:

How fast is India’s auto-component industry growing?

The more commercially useful question is:

Which components can Indian suppliers manufacture reliably enough to become part of OEM and Tier-1 localisation programmes?

What Is Auto Component Localisation?

Auto component localisation is the process of increasing the domestic manufacturing and sourcing of vehicle components that were previously imported or sourced from overseas suppliers.

Localisation can involve:

Mechanical components
Precision-machined parts
Electrical components
Electronic components
EV components
Fasteners
Connectors
Brackets and mounting parts
Transmission and steering components
Suspension and braking components
Body and chassis components

Localisation does not necessarily mean that every component must be manufactured in India.

Instead, the commercial objective is to identify components where Indian suppliers can meet the required:

Quality + Cost + Capacity + Delivery + Technical requirements.

How Fast Is India’s Auto Component Industry Growing?

India’s automotive component industry grew 12.7% in FY2025–26 to ₹7.60 lakh crore ($85.9 billion), according to the Automotive Component Manufacturers Association of India (ACMA).

ACMA expects the industry to grow approximately 8–10% during FY2026–27, supported by domestic demand and exports.

The growth is particularly relevant to OEM suppliers.

Supplies to OEMs increased 16.3% to ₹6.63 lakh crore during FY2025–26.

That tells procurement teams something important:

The opportunity is not only in the aftermarket. OEM sourcing is a major growth engine.

Why Does Localisation Matter More Now?

Localisation matters because India’s auto-component industry is growing while imports of electronics and EV components remain high.

ACMA reported that the industry experienced its first trade deficit in two years during FY2025–26, with imports growing faster than exports. Electronics and EV components were among the major areas contributing to import dependence.

This creates two simultaneous conditions:

Strong demand

Indian vehicle production and OEM sourcing are creating more demand for components.

Import dependence

Certain advanced components are still being sourced from overseas suppliers.

For Indian manufacturers, this gap can become an opportunity.

But only if the supplier can satisfy the OEM’s technical and quality requirements.

What Are OEMs Looking for in Indian Component Suppliers?

OEMs need suppliers that can consistently manufacture components to specification, at the required volume and quality, with reliable delivery.

A supplier evaluation normally extends well beyond piece price.

Procurement and engineering teams may evaluate:

Supplier factor	What the buyer wants to know
Manufacturing capability	Can the supplier make the component?
Material capability	Can it process the specified material?
Dimensional control	Can required tolerances be maintained?
Quality	Can requirements be consistently met?
Inspection	Can critical characteristics be verified?
Capacity	Can production volume be supported?
Traceability	Can production records be maintained?
Delivery	Can agreed schedules be maintained?
Development	Can samples be developed and qualified?
Cost	Is the total commercial proposition competitive?

This is why localisation is not simply a price-reduction exercise.

It is a supplier-development exercise.

Which Precision Components Can Support Automotive Localisation?

The answer depends on the OEM’s design and sourcing requirements.

However, precision metal manufacturing can potentially support automotive applications involving:

Brass components
Copper components
Aluminium components
Steel components
Stainless-steel components
Precision turned parts
Fasteners
Inserts
Shafts
Bushings
Connectors
Terminals
Mounting components
Custom OEM parts

The exact component, material and process must always be determined from the customer’s engineering drawing and specification.

A component manufacturer should therefore avoid claiming that every automotive part is suitable for localisation.

The better approach is:

Drawing → Feasibility → Sample → Qualification → Production

Why Are Precision Metal Components Important to Automotive OEMs?

A vehicle contains thousands of individual components.

Many are relatively small.

But small does not mean unimportant.

A precision component can be part of:

A mechanical assembly
An electrical connection
A sensor system
A mounting system
A steering or braking system
A transmission-related assembly
An electronic module
An EV subsystem

The component may represent a small percentage of the final vehicle cost while still being essential to the assembly.

That is why OEM procurement teams focus heavily on consistency.

How Does EV Growth Change Component Localisation?

EVs increase the importance of electrical, electronic and electro-mechanical components within the automotive supply chain.

India’s auto-component industry has identified EVs and advanced technologies as important growth areas, while the current import dependence in electronics and EV components demonstrates where localisation opportunities remain.

EV supply chains can require components related to:

Electrical connections
Power electronics
Battery systems
Thermal management
Sensors
Wiring and connectors
Motor systems
Structural and mounting components

Not every component is a precision-machined metal part.

But the broader EV ecosystem creates additional demand for engineered mechanical and electro-mechanical components.

Why Are Brass and Copper Relevant to Automotive Components?

Brass

Brass can be relevant to selected automotive electrical and mechanical components because of its combination of machinability, conductivity and corrosion resistance.

Potential applications may include:

Terminals
Connectors
Inserts
Electrical fittings
Precision-machined components

Copper

Copper is relevant where electrical conductivity is important.

Depending on the design, copper components can be used in:

Electrical connections
Conductive components
Selected terminals
Power-related applications

Aluminium

Aluminium can be relevant where low weight and thermal performance are important.

Steel and Stainless Steel

Steel and stainless steel can be used for applications where strength, durability or corrosion resistance are required.

The correct material should always be selected from the customer’s engineering specification.

What Does the Current Import Gap Tell OEMs?

The current trade deficit is an important signal.

It does not mean that India lacks manufacturing capability across the board.

Instead, it highlights areas where domestic supply has not yet kept pace with demand.

ACMA has specifically pointed to higher imports of electronics and EV components as part of the reason for the industry’s trade deficit.

For OEM procurement teams, this can lead to a practical question:

Which imported components could be competitively developed with qualified Indian suppliers?

That is where supplier-development programmes become important.

What Should OEMs Check Before Localising a Component?

A localisation programme should begin with technical requirements.

1. Drawing and specification

The supplier needs the correct engineering drawing and revision.

2. Material

The exact material grade and applicable specification should be identified.

3. Critical characteristics

The buyer and supplier should understand which dimensions and features are critical.

4. Production process

The supplier should determine whether the component can be produced consistently.

5. Inspection

The inspection method should match the customer’s quality requirements.

6. Sample qualification

Samples should be produced and evaluated before production approval.

7. Production capacity

The supplier should demonstrate the ability to support the required volume.

8. Traceability

The level of traceability should match the customer’s requirements.

9. Delivery

Lead time and production scheduling should be agreed before nomination.

10. Commercial evaluation

The buyer should compare the complete commercial proposition rather than only piece price.

What Is the Difference Between a Cheap Supplier and a Competitive Supplier?

A cheap supplier offers a low piece price. A competitive supplier delivers the required component at the right quality, cost, volume and delivery performance.

For OEM procurement, the second definition is more useful.

Consider a component quoted at a low price but requiring:

More incoming inspection
Higher rejection rates
Longer development cycles
Frequent delivery follow-up
Additional sorting
Unplanned production interruptions

The nominal piece price may be low.

The total cost may not be.

That is why supplier localisation should be evaluated using total cost and supply performance.

How Can Indian Precision Manufacturers Become OEM-Ready?

A precision manufacturer targeting automotive OEM and Tier-1 opportunities should focus on manufacturing discipline.

Important areas include:

Quality systems

The supplier should operate appropriate quality-management systems for the target application.

Process control

Critical production characteristics should be controlled consistently.

Inspection

The supplier should have appropriate measurement and inspection capability.

Traceability

Production information should be traceable where required.

Capacity

The supplier should understand actual production requirements before accepting nomination.

Development

The supplier should be able to move from drawing/sample to qualified production.

Delivery

The supplier should have a realistic production and delivery plan.

These capabilities help turn a supplier from a job shop into a more dependable component partner.

What Does Global Sourcing Mean for Indian Auto Component Manufacturers?

Global sourcing gives Indian component manufacturers an opportunity to become suppliers to international OEM and Tier-1 networks.

ACMA says India’s component industry is strengthening its global competitiveness through technology, localisation, manufacturing excellence and international collaboration.

The industry already has substantial export activity.

ACMA reports that auto-component exports reached $22.9 billion in FY2025, with major export categories including drive transmission and steering systems, engine components, suspension and braking systems, and body and chassis products.

This means Indian suppliers are not starting from zero.

The challenge is to continue moving toward higher-value and more technically demanding supply chains.

What Should a Tier-1 Supplier Ask a Precision Metal Manufacturer?

Before approving a supplier, a Tier-1 procurement team should ask:

What materials can you manufacture?
What component sizes and geometries can you support?
What tolerances can you consistently maintain?
How is material traceability handled?
What inspection equipment is available?
What is your current production capacity?
How are samples developed?
What quality documentation can be provided?
What is the expected production lead time?
Can production scale with the programme?

These questions help determine whether a supplier can support long-term production rather than only one prototype order.

How Can Localisation Reduce Supply-Chain Risk?

Localisation can provide an additional qualified supply source and reduce dependence on a single external supply route.

However, localisation should not be presented as a guaranteed solution to every supply-chain problem.

A domestic supplier still needs:

Reliable raw materials
Stable production
Quality control
Adequate capacity
Skilled people
Appropriate equipment
Strong supplier management

The goal should be resilient sourcing, not simply domestic sourcing.

Example: Evaluating an Imported Precision Component for Localisation

Imagine an automotive Tier-1 supplier currently imports a custom-machined brass component.

Before moving the component to an Indian manufacturer, the procurement team could evaluate:

Requirement	Verification
Drawing	Latest approved revision
Material	Specified brass grade
Annual volume	Actual programme demand
Critical dimensions	Drawing tolerances
Inspection	Required measurement method
Quality	Customer qualification requirements
Development	Sample approval process
Capacity	Supplier production capability
Traceability	Required documentation
Logistics	Delivery schedule
Commercial	Total cost comparison

This example is illustrative and does not represent a Premi Brasscom customer programme. Actual localisation decisions should be based on the customer’s engineering and commercial requirements.

What Is the Opportunity for Premi Brasscom International?

Premi Brasscom International manufactures precision metal components in brass, copper, aluminium, stainless steel and mild steel for automotive, electrical, electronic and industrial applications.

The company’s capabilities therefore align with a portion of the broader localisation opportunity where customers require precision-machined metal components.

However, localisation should be approached component by component.

The correct commercial process is:

Customer drawing or sample

↓

Material and manufacturing feasibility

↓

Sample development

↓

Inspection and qualification

↓

Production

↓

Repeat supply

This is more credible than simply claiming that every automotive component can be localised.

What Should Automotive Procurement Teams Do Next?

For OEM and Tier-1 procurement teams evaluating localisation opportunities, a practical next step is to identify components that:

Are currently imported
Have stable annual demand
Have clearly defined engineering specifications
Can potentially be manufactured domestically
Have measurable quality requirements
Have sufficient volume to justify supplier development
Can be qualified before production transfer

For Indian suppliers, the opportunity is to demonstrate that they can satisfy those requirements consistently.

Frequently Asked Questions

What is automotive component localisation?

Automotive component localisation means increasing the domestic manufacturing and sourcing of vehicle components that were previously imported or sourced internationally.

How fast is India’s auto component industry growing?

ACMA expects India’s auto-component industry to grow approximately 8–10% in FY2026–27 after reaching ₹7.60 lakh crore in turnover in FY2025–26.

Why is automotive localisation important in India?

Localisation can strengthen domestic manufacturing capability, reduce dependence on selected imports and create more resilient supply chains when qualified Indian suppliers can meet OEM requirements.

What components are suitable for precision metal localisation?

Potential areas include selected brass, copper, aluminium, steel and stainless-steel components, precision turned parts, inserts, fasteners, connectors and other engineered components, depending on the customer’s design.

Are brass components used in automotive applications?

Yes, brass can be used in selected automotive electrical and mechanical applications where its material properties meet the engineering requirements.

Are copper components used in automotive applications?

Copper can be relevant to automotive electrical and conductive applications where the specified design requires its electrical properties.

Does EV growth create opportunities for precision component manufacturers?

EV growth can increase demand for electrical, electronic and electro-mechanical systems, creating potential opportunities for qualified component suppliers depending on the application and design.

What should an OEM check before approving a localisation supplier?

OEMs should evaluate technical capability, material capability, dimensional control, inspection, quality systems, production capacity, traceability, development capability, delivery performance and total commercial cost.

Can a precision metal supplier replace an imported component immediately?

Not necessarily. Engineering validation, sample approval, qualification, supplier audits and production validation may be required before a component can be transferred.

What makes an Indian supplier attractive to global OEMs?

A combination of consistent quality, competitive total cost, technical capability, production capacity, reliable delivery and the ability to meet customer-specific requirements.

Conclusion

India’s automotive component industry is growing, but the next stage of growth will depend on more than higher production volumes.

It will depend on deeper localisation, stronger supplier capabilities and greater integration into global OEM supply chains.

ACMA’s FY2026–27 outlook of 8–10% growth shows that demand remains strong. At the same time, the industry’s trade deficit and continued imports of electronics and EV components show that significant localisation opportunities remain.

For OEMs and Tier-1 suppliers, the opportunity is to identify components that can be competitively developed with qualified Indian manufacturers.

For precision metal suppliers, the opportunity is to demonstrate:

Quality + Repeatability + Capacity + Technical Capability + Delivery Reliability.

Premi Brasscom International manufactures customised brass, copper, aluminium, stainless-steel and mild-steel components for automotive, electrical, electronic and industrial applications.

For a specific component localisation requirement, buyers can share a drawing, sample, material specification or sourcing requirement for manufacturing-feasibility evaluation.