US President Donald Trump’s intent to impose auto tariffs has limited impact on Indian car manufacturers and only serves to adversely affect companies in the US that source cheap auto components from India, said experts and government sources.
India does not export vehicles to the US, but Indian auto component manufacturers sell in the US at zero tariffs.
“Indo-US trade is primarily auto components (and not vehicles) and India exports components not more than worth $15 billion a year,” a senior official told businessline, adding that if US starts charging 15 per cent reciprocal tariffs on imports of auto components (same as India) then their companies will suffer because costs will escalate for them because of the high tariff rate.
As per Automotive Component Manufacturers Association of India (ACMA), exports of auto components grew by seven per cent year-on-year (y-o-y) to $11.1 billion (₹93,342 crore) in the first half of 2024-25 from $10.4 billion (₹85,870 crore) in H1 2023-24.
North America (the US) accounting for 31 per cent of exports (worth $3.67 billion) saw an increase of 8.3 per cent y-o-y. Europe also accounted for 31 per cent (worth $3.36 billion) y-o-y and Asia accounted for 22 per cent ($2.47 billion).
In imports, the US imported components worth $0.79 billion only during the H1 2024-25, while the maximum is from Asia accounting for $7.16 billion, followed by Europe at $5.40 billion in H1 FY2024-25.
According to ACMA, the US is the key destination for exports from India while China is key source of imports right now.
Government sources said the Ministry of Commerce and Industry has to take a view on the tariff rates for import of auto components from the US and whether to give any concession or not, will be their decision.
“Auto is only one sector, but the Ministry of Commerce has to look at the whole bilateral trade agreement (BTA) with the US. So, where any concession is to be given is a decision that the Ministry has to take,” a senior government official said.
According to the government, the auto component industry is targeting $100 billion in exports by 2030 to become one of the largest job creators in the country.