US President Donald Trump has announced a 25% tariff on automobile imports, effective from April, with an additional 25% tariff on major auto components—such as engines, transmissions, and powertrain parts—set to be implemented in May. Industry experts believe this will have a greater impact on Indian auto component manufacturers than on vehicle manufacturers.
Previously, the US imposed minimal tariffs on imported automotive components. India’s auto component exports to the US stood at $6.79 billion in FY24, while imports from the US were valued at $1.4 billion with a 15% duty. With the new tariffs, Indian suppliers may face challenges in maintaining competitiveness in the American market.
An industry executive noted that Indian automakers are unlikely to be significantly affected, as India does not export fully built cars to the US. However, Indian component manufacturers, which play a crucial role in the global supply chain, are expected to bear the brunt of these tariffs. JATO Dynamics India President Ravi G. Bhatia stated that India has not been specifically targeted, as the tariffs apply to multiple countries. He expressed confidence that Indian suppliers could adapt, especially given India’s cost-effective manufacturing.
Some Indian component manufacturers, such as Motherson Group, have already established operations in Mexico and Canada to leverage the North American Free Trade Agreement (NAFTA) and continue supplying to the US. Industry bodies like ACMA and SIAM have yet to issue statements, but the full impact on India’s auto component sector will become clearer as companies adjust their strategies.
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