High US tariffs are expected to impact nearly 8% of India’s total auto component production, according to ratings firm ICRA. Indian exporters are at a disadvantage compared to other Asian countries, making a trade agreement between India and the US crucial, ICRA added.
Auto component exports make up about 30% of the Indian auto industry’s revenue. The US alone accounts for 27% of these exports. As a result, the new tariffs are expected to directly affect 8% of India’s overall auto component production.
The US has imposed a 50% tariff on Indian goods, which puts Indian exporters at a disadvantage. Other countries like China, Japan, Vietnam, and Indonesia face lower tariffs, ranging from 15-30%. Manufacturers in Mexico and Canada are exempt under the United States-Mexico-Canada Agreement, increasing competition for Indian exporters.
Exports of auto components from India to the US have been steadily rising. They grew from $4.1 billion in FY2021 to an estimated $7.3 billion in FY2025. ICRA noted that 29% of the industry’s exports go to the US, followed by Europe at 30%.
