New Delhi: The latest announcement of US President Donald Trump by 25% of the tariff to completely built vehicles and automatic parts since April 3 sent shock waves through the global automotive industry. However, the analysis of Indian automotive exports suggests that the impact on the country’s automotive sector will be minimal, with some segments even see potential opportunities.
Indian automotive exports to the US in 2024 were relatively small, so the domestic sector was largely isolated since Trump’s customs increase in tariffs, the Global Business Research Initiative (GTRI) report said on Thursday.
Exports of passenger cars from India to the US in 2024 amounted to only $ 8.9 million, the Ministry of Commerce shows. This was a fraction of Indian Indian total exports of cars in India, India last year, suggesting that the new Trump tariffs would not have a small to any impact on the growing branch of the Indian car export.
The founder of Gtri Ajay Srivastava warned that if India decides to reduce tariffs on the import of passenger cars to store the US, it would be counterproductive. Srivastava referred to the experience of Australia at the end of the 80s when its car industry collapsed after the country reduced its automatic tariff from 45% to 5%.
Also read | India is looking for easier export rules because it promotes us lower tariffs
The US delegation led by Brendan Lynch, assistant to the US sales representative for South and Central Asia, is in India and organizes personal meetings with Indian business negotiations on the restructuring of tariffs and alignment with the levels of American tariffs for several products. The aim of this step is to reduce a business deficit, which in India was $ 35 billion in the years 2023-24.
Since the Indian automatic sector contributes almost a third of its production GDP, the protection of its stability remains a priority, Gtri said in her report.
The impact of US automotive rates on truck exports is expected to be marginal. India exported to the US in 2024 trucks worth $ 12.5 million, which represents only 0.89% of its global export of trucks.
Also read | India US Business Agreement on Risk Without Fast Authority: Gtri
Automatic parts of worries
The Indian auto -parts sector is based on the oldest category of recent American tariffs, with India exporting components worth $ 2.2 billion in 2024, which, according to the Ministry of Commerce of 29.1% of the country.
Although this figure seems significant, a closer look at the wider market dynamics suggests that India may not be at a big disadvantage. Last year, the US imported automatic parts worth $ 89 billion, with Mexico supplied $ 36 billion and China contributed $ 10.1 billion.
In the car chassis segment, however, there are some concerns equipped with engines, where the US represented global exports in India, India in the total Indian outlet portfolio of $ 28.2 million.
Also read | Did Trump’s threat to India-USA mutual threats?
Since 25% of the tariff pays in all export countries, the competitive position of India remains unaffected, Gtri said.
“India has strong support in production demanding and benefits from competing import tariffs, ranging from 0 to 7.5%. If suppliers can adapt to a new tariff landscape, the Indian market share in the US potentially increases over time,” said Srivastava, a former Indian business service worker.
Awaits the opportunity
At least one analyst believes that new car tariffs could even be an opportunity for Indian car manufacturers.
“With a global automotive industry that faces potential disturbances, limited direct exposure, and the competitive edge in cars suggests that the impact can be managed,” said Abhash Kumar, Associate Professor of the Economy on Delhi University. “A strategic and stable approach could help the country’s automotive sector to navigate changes and examine new opportunities for growth instead of rush.”
Also read | How could Trump’s ArmTwistizing on tariffs affect the Indian Superbike market
At the beginning of this month, Mint announced how Trump’s demand, that India was a motorcycle tariff that imported from the US could affect the home market for superbikes.
Indian exports of parts and accessories for motorcycles in the same period of FY24 increased sharply from $ 558.05 million in the same period FY24, which reflected growth of 27.09%in three years.
It was powered by government initiatives, such as the Production program (PLI) associated with production that increased domestic production and strengthened the global presence of the sector.
At the same time, according to the Ministry of the Ministry of Trade, imports of these components decreased from $ 408.59 million to $ 371.82 million in the same period, indicating a growing dependence on domestic production.
Also read | American mutual tariffs worsen the problems of Indian farmers
Catch all commercial reports, intelligence violations and the latest update of the Live Mint. Download Mint News and get daily market updates.
Automatic tariffs Businessnewstrump unlikely to rent an Indian automotive sector: messageMoreLess (Tagstotranslate) US automatic tariffs
