US President Donald Trump’s Tariff Hike Puts Indian Auto Component Exports at Risk
US President Donald Trump's Tariff Hike Puts Indian Auto Component Exports at Risk
India’s auto component exports, valued at $21.2 billion in FY24, face potential challenges following US President Donald Trump’s announcement of a 25% tariff on foreign auto imports. The move is expected to impact Indian companies such as Tata Motors, Eicher Motors, Sona BLW, and Samvardhana Motherson, according to a report by MoneyControl.
While Tata Motors does not directly export vehicles to the US, its subsidiary Jaguar Land Rover (JLR) has a significant presence in the American market. As per JLR’s FY24 annual report, the US accounted for 22% of its total sales, with nearly 400,000 vehicles sold worldwide. The vehicles sold in the US are primarily manufactured in the UK and other international plants, which will now be subject to the higher import tariff.
Eicher Motors, known for its Royal Enfield motorcycles, could also be affected as the US remains a key market for its 650cc models.
Among the major Indian auto component manufacturers, Samvardhana Motherson International Ltd supplies parts to top US automakers, including Tesla and Ford. However, with established manufacturing facilities in the US and Europe, the company is expected to have a lower impact compared to firms that rely entirely on exports.
Another key player, Sona Comstar, which specializes in differential gears and starter motors, derives 66% of its revenue from the US and European markets. In response to rising trade risks, the company has been diversifying its export base, focusing on China, Japan, and South Korea, with plans for these regions to contribute over 50% of its revenue within five years.
Other Indian auto component manufacturers with significant exposure to exports include Bharat Forge, Sansera Engineering, Suprajit Engineering, and Balkrishna Industries.
In FY24, shipments to the US and Europe—the world’s largest importers of auto components—accounted for approximately 4.5% of total global trade. With the new tariffs in place, Indian exporters may face additional cost burdens, impacting their competitiveness in the US market.
Source: Hindustan Times
