High US Tariffs Challenge India's Auto Component Export Growth
High US tariffs impact 8% of India's auto component production, putting exporters at a competitive disadvantage. Other Asian nations face lower tariffs, and North American competitors are exempt under USMCA. Export growth remains strong, highlighting the need for an India-US bilateral trade agreement.
- Country:
- India
India's auto component sector is grappling with high tariffs imposed by the US, which are anticipated to impact approximately 8% of the nation's total production, according to ratings firm Icra. The rising tariffs underscore the critical nature of establishing a bilateral trade agreement between India and the United States.
Indian exporters find themselves at a competitive disadvantage compared to other Asian countries such as China, Japan, Vietnam, and Indonesia, who face lower US tariffs. Furthermore, exporters from Mexico and Canada remain tariff-exempt under the USMCA, compounding the challenges for Indian manufacturers.
Despite the hurdles, the export value of auto components from India to the US has been on a steady ascent, reaching projected figures of USD 7.3 billion by FY2025. The sector's revenue breakdown further emphasizes the significance of international trade, with overseas markets comprising a substantial portion, led by Europe and the US.
(With inputs from agencies.)
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