Trump’s Auto Tariffs to have minimal impact on India’s automobile sector: GTRI

The US Imported $ 89 Billion Worth of Auto Parts Globally Last Year, with Mexico Accounting for $ 36 Billion, China for $ 10.1 Billion, and India for Just $ 2.2 Billion. File (REPRESENT’s Image) | Photo Credit: Reuters

The implications of the us announsement to impose 25% important duty on Completely Built Vehicles and Auto Parts from April 3 Remain Limited for India’s Auto Industry and May Eveen Present An opportun for domestical Exporters, Think Tank Gtri said on Thursday (March 27, 2025).

On March 26, US President Donald Trump Announced A Sweeping 25% Tariff on Completely Built Vehicles (CBUS) and Auto Parts, A Move Set to take to take affect on April 3.

“Annalysis of India’s Auto and Auto Component Exports in Calendar Year 2024 Suggests that the impact of these tarifs on Indian expenses Founder ajay srivastava said.

In the case of passenger cars, the thought tank said India expert a modest $ 8.9 million worth of vehicles to the us in 2024, which is just 0.13% of the country’s total experts of $ 6.98 bills.

He said this negligible exposure implies the tariffs will have no real effect on India’s Thriving Car Export Business and in Other Categories Too, Us Exposure Is Exture Is Exture Low or Manageable.

Truck expenses to the US study at just just just $ 12.5 million, representing 0.89% of India’s Global Truck Exports and these Figures Confirm a Limited Vulnerability.

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However, it said, some impact is likely in car chassis fitted with engines, where America Accounted for $ 28.2 Million of India’s’s $ 246.9 Million in Global Exports (11.4%).

“The segment that warrants the most attention is auto parts. India Exported $ 2.2 Billion Worth of Auto Parts to the Us in 2024, Compressing 29.1% of its Global Auto Part Exports. WHILELY APEREALY Concerning, a closer look reveals a Level-Playing Field, “He said.

The US Imported $ 89 Billion Worth of Auto Parts Globally Last Year, with Mexico Accounting for $ 36 Billion, China for $ 10.1 Billion, and India for Just $ 2.2 Billion.

Since the 25% tariffs apply across the board, all exporting countries face the same hurdle.

In this context, he said, India’s auto component industry may even find an opening.

“With its competitive advantage in labor-intenseve manufacturing and competitive India’s important tariff structure (ranging from zero to 7.5%), India Cold Increase Its Market Share in the Us Over Time, “He said adding raather than retaliating, the Indian government should view the tariff move as a neutral or even mildly Advantageous event in the long term.

He added that India’s sector remains larger insulated.

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With Minimal Direct Exposure in Most Categories and Potential Upside in Auto Parts, There is a little reason for India to count, Mr. Srivastava said.

He suggested that any lowering of tariffs by India to avoid tariffs on passenger cars would be counterproductive.

Citing an example of Australia, He Said, When Australia Reduced Its Import Tarifs from 45% to 5% in the late 1980s, it Paved the Way for the Way for the Eventu Collaps of Ito MANUFACTURING INDUSTURING AITS

“With the Indian Auto Sector Contributing Nearly One-Third of the Country’s Manufacturing GDP, Any Similar MSstep must be avoided. Preserving the stability of the Indian auto sector is Vital,”