US Tariffs to Impact 8 Percent of India's Auto Parts Production
According to reports, high tariffs in the US are anticipated to impact nearly 8 percent of India's total auto component production. Indian auto parts exporters face a comparative disadvantage compared to many other Asian exporting countries, emphasizing the necessity of finalizing a bilateral trade agreement between India and the US.
Exports of auto components make up almost 30 percent of the industry's income, with the United States representing 27 percent of this total.
Icra indicated that nearly 8 percent of India's total auto component output is anticipated to be directly impacted by the tariffs recently announced.
The implementation of a 50 percent tariff on Indian products puts Indian auto parts exporters at a disadvantage relative to their Asian peers, as nations like China, Japan, Vietnam, and Indonesia encounter reduced tariffs ranging from 15 to 30 percent, it highlighted.
Also Read: Leadership Movements Heralding the Next Phase of Innovation and Growth
Additionally, producers in Mexico and Canada continue to be exempt under the United States-Mexico-Canada Agreement (USMCA), which further heightens competitive pressures on exporters from India, as per reports.
Also Read: SCO Summit 2025: Outcomes of Modi-Xi Meeting
India's exports of automotive parts to the US have been increasing consistently, growing from $ 4.1 billion in FY2021 to $ 6 billion in FY2022, $ 6.5 billion in FY2023, $ 6.8 billion in FY2024, and are projected to hit $ 7.3 billion in FY2025.
Geographically, Icra reported that exports make up 29 percent of the nation's automotive parts industry, while domestic sales represent 56 percent and replacement demand constitutes 15 percent.
Also Read: A Brief History of India's Transformation Under PM Narendra Modi
In exports, Europe represents 30 percent, the US 27 percent, Asia 26 percent, Latin America 3 percent, and other areas 13 percent,according to reports.