India US Trade Deal Boosts Auto Component Competitiveness

06 Feb 2026 CW Team

ACMA thanked the Prime Minister and the Commerce Minister for securing the agreement, noting that it reflects a strengthening strategic and economic partnership between the two democracies. The association said a proposed reduction in reciprocal tariffs to 18 per cent will improve market access and pricing dynamics for exporters.\n\nAt a time of structural realignment in global supply chains, the body suggested the agreement provides greater predictability and confidence for long term trade and investment decisions.

It said a more balanced and facilitative framework could unlock further growth in bilateral trade and deepen industrial collaboration. ACMA indicated that the deal may encourage technology led partnerships across advanced manufacturing, electrification, electronics and clean mobility solutions.\n\nIndia's auto components exports to the United States stood at USD 3,124 million in the first half of the current financial year, while United States exports to India were USD 844 million over the same period.

In the fiscal year 2025 the combined turnover of the domestic auto component industry reached USD 80.2 billion, with USD 22.9 billion in exports and a trade surplus of USD 500 million. The association emphasised the need for closer engagement with policymakers on both sides to translate the agreement into tangible outcomes for industry and to support resilient supply chains.\n\nIndustry representatives said adoption of the agreement could encourage investment in product development and quality enhancement that align with evolving regulations and customer preferences in the United States.

They highlighted potential gains in areas such as electric vehicle components and electronics where Indian manufacturers have begun to scale capabilities. ACMA underlined that sustained policy dialogue and targeted incentives will be important to convert the diplomatic achievement into manufacturing growth and export competitiveness.

The Automotive Component Manufacturers Association of India (ACMA) described the India US trade agreement as a positive development that will enhance the competitiveness of Indian automotive components in the United States market. ACMA thanked the Prime Minister and the Commerce Minister for securing the agreement, noting that it reflects a strengthening strategic and economic partnership between the two democracies. The association said a proposed reduction in reciprocal tariffs to 18 per cent will improve market access and pricing dynamics for exporters.\n\nAt a time of structural realignment in global supply chains, the body suggested the agreement provides greater predictability and confidence for long term trade and investment decisions. It said a more balanced and facilitative framework could unlock further growth in bilateral trade and deepen industrial collaboration. ACMA indicated that the deal may encourage technology led partnerships across advanced manufacturing, electrification, electronics and clean mobility solutions.\n\nIndia's auto components exports to the United States stood at USD 3,124 million in the first half of the current financial year, while United States exports to India were USD 844 million over the same period. In the fiscal year 2025 the combined turnover of the domestic auto component industry reached USD 80.2 billion, with USD 22.9 billion in exports and a trade surplus of USD 500 million. The association emphasised the need for closer engagement with policymakers on both sides to translate the agreement into tangible outcomes for industry and to support resilient supply chains.\n\nIndustry representatives said adoption of the agreement could encourage investment in product development and quality enhancement that align with evolving regulations and customer preferences in the United States. They highlighted potential gains in areas such as electric vehicle components and electronics where Indian manufacturers have begun to scale capabilities. ACMA underlined that sustained policy dialogue and targeted incentives will be important to convert the diplomatic achievement into manufacturing growth and export competitiveness.

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