The 25% import tariff imposed by the Donald Trump administration on automobiles a week ago went into effect on Wednesday. The tariffs were announced on March 26. Trump had also announced a 25% import duty on foreign-made auto components, used in vehicles assembled domestically. The 25% tariff on auto components will go into effect on May 3.

While the industry did not react to the tariffs when they were first announced in March, many industry voices spoke about them today after similar tariffs were imposed on other industries as well.

We bring you the major reactions below:

Shradha Suri Marwah, President, Automotive Component Manufacturers Association of India:

“It is to be noted that autos & auto parts and steel & aluminium articles, already subject to Section 232 tariffs at 25%, announced earlier in President Trump’s order on March 26, 2025, are not covered in the aforementioned order. The detailed list of auto components that will be subject to 25% import tariff in the US is however awaited.”

“ACMA remains hopeful that the ongoing bilateral negotiations between the Indian and U.S. governments will lead to a balanced resolution that benefits both economies. We believe that the strong trade relationship between India and the US, especially in the auto components sector, will encourage continued dialogue to mitigate the impacts of these measures.”

Rajesh Menon, Director General, Society of Indian Automobile Manufacturers:

“The recent announcement by the US government on reciprocal tariffs, it is to be noted that autos are not covered in this order since they are already subject to Section 232 tariffs at 25%, announced earlier in President Trump’s order on March 26, 2025. We don’t expect any significant impact on the Indian Automobile industry since there are limited exports to US, but we will continue to monitor the situation.”

Srikumar Krishnamurthy, Senior Vice President and Co-Group Head, Corporate Ratings, ICRA Ltd:

“The US Government has imposed a 25% tariff on passenger vehicles and light trucks. As the PV exports from India to the US represent less than 1% of the total PV exports, the imposition of the tariff does not have any material impact on the Automotive OEMs. The scenario is however different for auto components”

“Auto components have not featured in the latest set of additional tariff announcement. India’s auto components exports accounted for 29% of industry revenues in FY2024. Of this, 27% was to the US. While the situation is evolving, the recent tariff related development and the consequent inflationary pressures and slowdown in demand in the US could have a negative impact on revenue and earnings for component exporters (in the affected product categories) over the next few months. Nevertheless, with higher tariffs being levied on other competing nations, this could also create long-term opportunities for the exporters. Exporters dependent on the US are also trying to diversify their revenue base across other geographies (including Asia). Measures to improve value addition, diversification into non-auto segments and cost-optimisation strategies are also being worked upon to reduce the potential impact on margins.”

Saurabh Agarwal, Partner and Automotive Tax Leader at EY India:

“With US automotive tariffs rising, India’s electric vehicle sector has a prime opportunity to capture a larger share of the US market, especially in the budget car segment. China’s 2023 auto and component exports to the US stood at $17.99 billion, while India’s were only $2.1 billion in 2024, highlighting the potential for growth. To accelerate this, the government should enhance the PLI scheme by including more auto components, opening it to new players, and extending it by two years.”

Arun Agarwal, Vice President Research, Kotak Securities:

“This move could result into increase in car prices in the US and cost pressure for component suppliers. In the event of car prices going up, the US car market may witness a steep volume decline and that can impact revenue for component players supplying parts to the US car/light truck industry. Further, margins of suppliers may come under pressure as they may need to partly absorb cost pressures. We believe there will be some impact, which the suppliers will have to bear. Having said that, it needs to be seen on how higher tariffs are absorbed across the supply chain that includes customers, OEMs and suppliers. The extent of impact for Indian players will also depend on the US-India bilateral agreement over the next few months.”

From Samvardhana Motherson International Ltd:

“A significant part of the products supplied by the Company and/or its subsidiaries to its various customers in the U.S are either manufactured in the U.S. or are United States-Mexico-Canada Agreement (USMCA) compliant and therefore as per our present assessment the said Executive Orders may not have any material impact on the financials of the Company. However, impact (if any) going forward depends on various inclusion(s) / exclusion(s) of product(s), component(s), territories(s), tariff(s) etc., forming part of said Executive Orders, as may be notified or amended.”

📰 Crime Today News is proudly sponsored by DRYFRUIT & CO – A Brand by eFabby Global LLC

Design & Developed by Yes Mom Hosting