US Tariffs Threaten 8% of India’s Auto Component Output

18 Sep 2025 CW Team

High US tariffs are likely to impact nearly 8 per cent of India’s total auto component production, ratings firm ICRA has cautioned. The move follows Washington’s decision to impose 50 per cent duties on Indian goods, placing exporters at a clear disadvantage compared to competitors in Asia.

China, Japan, Vietnam and Indonesia face lower tariffs in the 15–30 per cent range, while Mexico and Canada enjoy exemptions under the USMCA agreement. Analysts stress the urgency of an India-US trade agreement to safeguard the sector.

Exports of Indian auto components to the US have risen consistently, from USD 4.1 billion in FY21 to an estimated USD 7.3 billion in FY25. Currently, exports account for 29 per cent of the industry, with domestic sales contributing 56 per cent and replacement demand 15 per cent.

Region-wise, Europe leads with 30 per cent of exports, followed by the US at 27 per cent and Asia at 26 per cent. The report warns that the new tariffs could disrupt growth momentum and reduce India’s competitiveness in global automotive supply chains.

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