US Tariff Hike on Auto Imports: An Opportunity for India's Exporters?

The US's decision to impose a 25% import duty on autos could minimally impact India. While some segments like auto parts may face challenges, India's industry is largely shielded. India's competitive edge may boost its US market share, presenting an opportunity rather than a threat.

The United States has announced a 25% import duty on completely built vehicles and auto parts, effective April 3, raising questions about the implications for the Indian automotive industry. However, according to the Global Trade Research Initiative, the effects on India might be minimal, with potential advantages on the horizon.

India's auto exports to the US in 2024 were modest, with passenger cars accounting for just 0.13% of the total exports of $6.98 billion, and trucks representing 0.89% of global truck exports. These figures underline the limited vulnerability India faces concerning these new US tariffs, bolstering confidence within the industry.

Despite a more substantial 29.1% of auto parts exported to the US, the uniform application of tariffs could level the playing field globally. With competitive labor and import tariff structures, India may capitalize on increasing its market share in the US. Experts suggest viewing this tariff not as a threat, but a strategic opportunity.

(With inputs from agencies.)