Higher import duties could affect Indian auto parts and tyre exports, with potential global supply chain shifts
The United States has announced a 25% tariff on imported cars and select auto components, a move that could trigger global trade retaliation from the European Union and Canada. While the immediate impact on Indian automakers is limited, key segments like auto parts and tyres—where the US is a major export market—may face repercussions, reported timesofindia.indiatimes.com.
Indian Auto Exports to US Under Pressure
With $2.2 billion in auto component exports to the US, Indian suppliers contribute nearly 29% of total auto part shipments. The tyre sector, with exports worth ₹4,259 crore ($500 million) to the US, also commands a 17% market share.
“The US has traditionally been the largest export market for Indian tyres. However, if tariffs apply uniformly across nations, India’s cost advantage and adherence to global standards could help retain its market share,” said Rajiv Budhraja, Director General of the Automotive Tyre Manufacturers Association.
Potential Impact on Key Players
Auto parts manufacturers with operations in Mexico may also be affected. Companies like Sona Comstar, which supplies Tesla, and Sundaram Fasteners, a key supplier to GM, could face margin pressure due to the tariffs.
For passenger and commercial vehicles, the US is not a significant export market for India, accounting for less than 1% of total exports. India’s right-hand drive vehicles are primarily sold in West Asia, Africa, and SAARC nations, while two-wheeler exports are strong in Southeast Asia and Latin America.
Future Global Strategy for Indian Firms
Experts believe that while Indian companies may take a hit, their relative competitiveness against rivals from Vietnam, Thailand, and China remains unchanged.
“If Indian firms set up manufacturing facilities in the US, they could benefit from tariff exemptions, but managing global supply chains will become more complex,” said the CEO of a leading auto component firm.
Tata Motors-owned Jaguar Land Rover (JLR), which has a significant presence in the US, could also be one of the hardest hit.
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