US President Donald Trump's 25 percent tariff on automobile imports will have a huge impact on auto component manufacturers

US President Donald Trump's announcement of 25 per cent tariffs on automobile imports is likely to impact auto component makers more than Indian automakers. Industry experts believe that the move could have a negative impact on India's exports of engine and powertrain parts, transmission and electrical components. Trump announced on Wednesday that a 25 percent tariff will be imposed on imported vehicles in the United States from April, while an additional 25 percent tariff will be applied on engines, transmissions and other auto parts from May. "The impact on Indian automakers will be minimal as exports of fully built cars from India to the US are negligible," an industry official said. " As per industry estimates, in FY 2023-24, India's exports of auto components to the US stood at $6.79 bn, while India's imports from the US stood at $1.4 bn, on which 15 per cent duty was already being imposed. Before Trump's announcement, there were almost zero tariffs on Indian auto components in the US. JATO Dynamics India President and Director Ravi G Bhatia said the impact of Trump's tariffs will definitely be there, but it will not be a huge shock. "India has not been specifically targeted, this tariff will apply to India's competitors as well. " He said Indian suppliers can find a way to maintain their position in the US market on the strength of their low-cost manufacturing capabilities. However, he also admitted that this tariff could be a concern for Indian automakers who were planning to expand in the US market, especially in the field of electric vehicles. Strategy of Indian companies: Manufacturing out of the US

Some major Indian auto component makers have already set up plants in Mexico and Canada to continue supplying to the US under the NAFTA (North American Free Trade Agreement).