Trump tariffs put India's car components manufacturers at risk of a slowdown.

With US President Donald Trump's impending import tariffs having an impact on global auto manufacturing, Indian auto parts manufacturers, who are already facing low local demand, now run the prospect of losing sales in their largest overseas market.With a 25% import tax scheduled to go into effect on April 3, Trump had first targeted fully finished cars. However, by May 3, further taxes on auto components including engines, transmissions, and electrical systems are expected to be implemented. Major automakers Ford Motor Company, General Motors Co., and Stellantis NV began frantically pressing to have particular components excluded as a result, leaving Indian suppliers in a precarious situation.

In the year ending March 31, 2024, the US accounted for about one-third of the $21.2 billion car components business, making it the largest market for India's exports. Partho Banerjee, senior executive director at Maruti Suzuki India Ltd., told reporters on Tuesday that the local passenger car industry has been slow and that growth is only anticipated to be 2% for the year ending March 2026.According to Jay Kale, an analyst for the car industry at Elara Capital, "Original equipment manufacturers had expected a robust outlook for US growth." He stated that "the only silver lining market could falter" because to the impending tariff. Since the proposed 25% tariff on auto parts is harsher than anticipated, it has alarmed Indian manufacturers. Since that is the highest import charge that India imposes, the industry had first projected that they might be subject to a 15% levy in the event that the US applies reciprocal tariffs.