Things in a flux but see light at the end of tunnel: Bharat Forge on Trump tariffs

Time of India

12-05-2025

HighlightsIndian auto component makers remain cautiously optimistic despite the uncertainty of steep US tariffs, hoping for long-term gains. Bharat Forge and Sona BLW foresee export opportunities amid global supply disruptions but acknowledge near-term challenges. ICRA warns new US tariffs could slash component OEM earnings by up to ₹4,500 crore and lower industry revenue growth projections.
New Delhi:
The threat of steep tariffs on
auto components
by the United States has, till now, failed to dampen the spirits of Indian OEMs, though dark clouds of uncertainty continue to hover over the horizon. Many prominent manufacturers have been asserting that India is in a good place but also throwing up their hands at specifics of the tariff fallout. Patience is certainly a virtue but will
Trump tariffs
help Indian parts' makers take away some business from other countries and simultaneously increase their exports to the USA? Have some clients of these OEMs indicated a change in order quantities or prices? There appear to be no clear answers yet.
India is a strong country with very good manufacturing capability and we think that we will see light at the end of this tunnelAmit Kalyani
Last week, the top management of
Sona BLW Precision Forgings
spoke of a silver lining in the long term for Indian parts' makers but also admitted that the short term remains difficult. Now
Bharat Forge
has echoed a similar sentiment.
Read more: Bharat Forge shares in focus as Trump plans to ease auto tariff impact
'…things are in a flux and I think the Indian government and Indian manufacturing are cooperating to make sure that we take advantage and are in a good situation even with the United States tariff situation. India is a strong country with very good manufacturing capability and we think that we will see light at the end of this tunnel. Thanks to the leadership and let's say the way the Indian government is handling the situation on tariffs. I think there should be a good solution in place for us sooner than later…,' Vice Chairman and MD Amit Kalyani said after repeated questions from analysts on the fallout of the tariffs on the company's business. Kalyani admitted to 'a lot of uncertainty' though and urged everyone to wait and watch.
'I think India will be in a let's say neutral position to advantageous position vis-à vis many other places and I think this should give a significant opportunity to Indian companies to both manufacture in India and to partner with global companies for mutual beneficial opportunities,' Kalyani said.
Global automotive production, and this I include every market, may see disruptions due to supply chain complexities and high dependence on China, especially for rare earth materialsVivek Vikram Singh
Meanwhile, Sona had said given out two factors to justify its optimism: a) a been there, done that attitude, which is a result of a large order book and substantial growth after the Covid19 disruption b) hope that in the medium to long term, weaker global auto parts manufacturers may not survive the impending chaos whereas companies with strong balance sheets like Sona will be able to ride the trough of tariffs. But the short term worry remains.
Sona provides mission critical systems for electrified and non electrified powertrains to BEVs as well as ICE vehicles, in India and many markets across the world.
We are not immune to the demand and supply disruptions. But if you can look beyond the short term, I think there is also a lot of opportunityVivek Vikram Singh
Passenger cars first off the block
Bharat Forge's Kalyani said that so far, only passenger car parts will be attracting higher tariffs from the US. To a question on how customers of the company have reacted and whether they are going slow on orders, Kalyani repeated the 'wait and watch' phrase, while emphasising that the company's US order book remains strong.
Sona's MD and Group CEO
Vivek Vikram Singh
had said earlier that the tariffs will adversely impact the demand for cars as well as light trucks. And since Sona is a supplier to automakers globally, 'we may not be, we in fact are not immune to the demand and supply disruptions. But if you can look beyond the short term, I think there is also a lot of opportunity. Second, global automotive production, and this I include every market, may see disruptions due to supply chain complexities and high dependence on China, especially for rare earth materials.'
Read more: Bharat Forge, Tata Motors, other auto stocks tumble up to 9%, extending tariff led rout
In a recent comment on the impact of Trump tariffs on Indian auto component makers, ICRA had estimated anywhere between ₹2,700 crore to ₹4,500 crore on the component OEMs' earnings after the imposition of steep US tariffs on key automotive parts. The new levies include 25per cent tariff on engines, transmission, electrical components and other auto parts. These tariffs may also moderate the overall auto component industry's revenue growth to 6-8per cent in the current fiscal, which is a downward revision from an earlier projection of 8-10per cent .
Speaking about the impact of tariffs, a senior component industry executive had said earlier that problems could arise if China were to undercut Indian auto parts' exports through any kind of opaque subsidies. Other problem scenarios could include a demand slump in the US market and if Trump were to offer selective tariff relaxations to other countries. India's component exports were worth 6.79 billion US dollars in FY2024.