Goldman Sachs expects India’s precision machining and auto parts industry to grow revenue at a 10% CAGR from FY26 to FY30, driven by diversification into semiconductors, defence, aerospace, EVs and data centres. That takes it from $85.6 billion to $124.4 billion. But EBITDA is forecast to grow faster: 15% a year. Note which number is bigger. That gap is the whole argument.
Goldman isn’t forecasting more cars. It’s arguing the market has misclassified an industry. These firms have been priced as cyclical auto component makers, when many are now shifting product mix toward larger, more resilient profit pools. India’s component base was never really an automotive industry. It’s a precision machining industry that happened to sell to carmakers, and it’s learning it can sell the same capability at better margins to buyers who care about tolerance, not volume.
The evidence is on the balance sheets. At Bharat Forge, auto fell to 58% of revenue in FY24 from 80% in FY07; its defence order book was around ₹11,000 crore by May 2026. NRB Bearings, Sansera and Craftsman Automation are making the same move. Balu Forge has a five-year MoU to supply large-calibre shells to a NATO-affiliated buyer. None bought different machines. They requalified the ones they had.
Which is where the difficulty sits. The machine transfers; the discipline doesn’t. Automotive rewards cycle time and volume. Aerospace and defence run on first-article inspection, full traceability and frozen processes. IATF 16949 gets you nowhere near AS9100 or NADCAP, and that’s years and lakhs of rupees before a single billable part ships. For a Tier-1, it’s an investment decision. For the Tier-2 and Tier-3 shops that make most of India’s components, it’s existential, and many won’t clear it.
Why this matters
Auto components were about 25% of India’s manufacturing GDP in 2024. When a sector this size gets rerated, it changes what Indian manufacturing is understood to be capable of. And the re-rating is specific: Goldman isn’t pricing demand, which already exists and is served today from Japan, Germany and the US. It’s pricing the odds that Indian firms qualify to take a share.
Qualification, not capacity, is the variable. India has the machines, the engineers and the cost position. What it lacks is audit history, the approved-supplier listings and traceability records a buyer of jet-engine rings demands before a first order. Capital can’t buy that; it’s built one contract at a time.
So the 10% is the easy half. The 15% is earned one audit at a time, won or lost in the Tier-2 and Tier-3 shops no analyst covers.