NextFin news, New Delhi, this Wednesday — High tariffs imposed by the United States on Indian goods are expected to affect close to 8% of India's overall auto component production, the ratings firm Icra reported on Wednesday.
The tariffs, which include a 50% duty on Indian auto components, place Indian exporters at a relative disadvantage compared to other Asian exporting nations such as China, Japan, Vietnam, and Indonesia, where tariffs range between 15% and 30%. Additionally, manufacturers in Mexico and Canada remain exempt from such tariffs under the United States-Mexico-Canada Agreement (USMCA), intensifying competitive pressures on Indian exporters.
Indian auto component exports contribute nearly 30% to the industry's revenues, with the United States alone accounting for 27% of this export share. As a result, the recently announced US tariffs are expected to directly impact about 8% of India's auto component production.
Exports of auto components from India to the US have been steadily increasing, rising from USD 4.1 billion in fiscal year 2021 to an estimated USD 7.3 billion in fiscal year 2025. Geographically, exports constitute 29% of the country's auto component industry, with domestic sales making up 56% and replacement demand 15%. Within exports, Europe accounts for 30%, the US 27%, Asia 26%, Latin America 3%, and other regions 13%, according to Icra.
The imposition of these tariffs highlights the importance of concluding a bilateral trade agreement between India and the United States to mitigate the disadvantages faced by Indian exporters.
This information was reported by Icra and covered by news agencies including PTI and published on September 17, 2025, in New Delhi.
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