The high American tariffs stored by Trump’s administration are expected to affect approximately 8% of the total Indian car production, ICRA said on Wednesday.
This disruption will indicate Indian car exporters to a relative disadvantage compared to most of its Asian peers who export to the United States, emphasizing the urgency of the bilateral trade agreement in India-USA to provide exporters’ relief, reported the PTI and report.
At the beginning of July, US President Donald Trump deposited another 25% tariff to the top of an existing 25% of the tariff, thus increasing the overall tariff to 50% to Indian goods, quoting a continuous purchase of Russian oil.
Tariffs: India at a disadvantage
The export of automotive components to America contributes almost 30% to the sector’s income, with only the US representing 27% of this shares, according to the PTI report.
“As a result, almost 8 % of the total production of cars in India is expected to be directly affected by recently announced tariffs,” ICRA said.
The deposit of 50% of the tariff on Indian goods places the exporters of Indian cars at a disadvantage compared to their Asian counterparts, including China, Japan, Vietnam and Indonesia, who face lower tariffs of 15-30%, emphasized.
In addition, manufacturers in Mexico and Canada have a competitive advantage on the US market, because these countries have been exempt from tariffs on the basis of an agreement on the US-Mexiko-Kanada agreement (USMCA), which further intensifies pressure on Indian exporters, she added.
Indian automatic parts for us export
Exports from India have risen from $ 4.1 billion in FY2021 to $ 6 billion in FY2022. Later in FY2023 jumped to $ 6.5 billion and then reached $ 6.8 billion in FY2024. It is estimated that the total export of these components will reach $ 7.3 billion in FY2025, which has been constant growth over the years.
Geographic exports include 29% of the car industry in the country, with a domestic sale of 56% and a 15% replacement requirement, as PTI quotes.
Regions in which India exports automatic components include Europe, which represents 30%, 27%of the US, Asia 26%, Latin America 3%and other regions of 13%, added.
After Trump’s tariffs entered into force on August 7, 2025, the Indian Indian Car Industry of $ 111 billion is working and looking at alternative markets as part of the strategy and agenda, the Mint report said.
(Tagstotranslate) high American tariffs
