US Tariff Shift: India Poised for Auto Component Export Boom

President Donald Trump's new 25% tariffs on auto imports may shake up global supply chains, but India sees an opportunity. While insignificant in car exports, India's strong auto component market, highly targeted by America's supply chain changes, could greatly benefit from the shifting international landscape.

The recent decision by US President Donald Trump to implement a 25% tariff on auto and auto component imports is set to reshape the global automotive supply chain. India's Federation of Indian Export Organisations (FIEO) perceives this as a potential boon for the country. Ajai Sahai, Director General and CEO of FIEO, explained to ANI that car exports to the US are minimal, sparing Indian automakers from significant impact.

Highlighting the figures, Sahai noted that out of India's $6.8 billion car export in 2024, less than $10 million went to the US, representing a mere 0.13% of India's car exports. However, the auto components sector could experience a significant boost. Currently, about 30% of India's auto component exports are destined for the US. With the new tariff affecting all countries, India might gain an edge due to its competitive standing in this labor-intensive sector.

Countries like Canada and Mexico, heavily reliant on the US market, are expected to reassess their strategies, possibly considering reciprocal tariffs. However, for India, the situation seems optimistically different. Sahai emphasized India's advantage in the auto parts sector, suggesting that the country could emerge as a winner amid these trade shifts. President Trump has signed a proclamation to enforce the tariff starting April 2nd, covering a comprehensive range of automobile parts. Despite these market uncertainties, India's auto component sector stands to potentially benefit from these global trade dynamics.

(With inputs from agencies.)