Auto component makers may see up to ₹4.5k cr revenue hit this fiscal due to tariffs
New Delhi, Apr 28 (PTI) Leading auto component manufacturers could take a revenue hit of up to ₹ 4,500 crore in the current fiscal due to dip in overseas shipments stemming from the tariff-related impact, ratings firm Icra said on Monday.
Icra expects the revenue growth of Indian auto component industry, represented by sample of 46 auto ancillaries with aggregate annual revenues of over ₹ 3 lakh crore in FY2024, to ease to 6-8 per cent in FY2026, against 8-10 per cent projected earlier, if there is mid-to-high single-digit revenue decline in exports to the US, stemming from the tariff-related impact, it said in a statement.
The steep increase in import tariffs imposed recently by the US is estimated to burden the entire supply chain with an incremental cost of around ₹ 9,000 crore, which will need to be borne by the US consumers, US importers, and Indian exporters, it said.
The extent to which the Indian auto component exporters share the cost burden will be contingent on their competitiveness and the price elasticity of the products exported.
"While the auto component suppliers with whom Icra has interacted indicate that most of the incremental costs would be passed on, however, as in any buyer-supplier negotiation, the extent of pass-through would depend on the supplier's criticality, share of business, competition, and technological intensity of the components supplied," Icra Senior Vice President and Head - Corporate Ratings Group Shamsher Dewan said.
If, on average, 30-50 per cent of the incremental tariff costs are to be absorbed by the Indian auto component exporters, Icra estimates an earnings impact of roughly ₹ 2,700-4,500 crore, which is 3-6 per cent of the auto component industry's operating profits and 10-15 per cent of the auto component exporters' operating profits, he added.
The Indian auto component industry demand continues to benefit from a diversified mix of end-user segments and geographies, with over 70 per cent of its revenues coming from domestic sales.
The US constituted only close to 8 per cent of the overall industry revenues in FY2024.
Export of auto components to the US grew at a compound annual growth rate (CAGR) of 15 per cent during FY2020-2024, Icra noted.
The US government imposed a 25 per cent tariff on imported key automobile parts (engine, transmission, powertrain, and electrical components) vide an order dated March 26, 2025, effective May 3, 2025.
About 65 per cent of India's auto component export basket is estimated to fall under the 25 per cent import tariff category.
Prior to this, a 25 per cent tariff was imposed on import of steel and aluminium content in auto parts.
Subsequent to the order dated March 26, 2025, a reciprocal tariff of 26 per cent was imposed on exports from India to the US, on which there is a temporary pause for 90 days, but with a 10 per cent ad valorem duty still applicable.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Indian Express
13 minutes ago
- Indian Express
‘My true factual story is being heard': Fugitive Vijay Mallya overwhelmed as podcast hits 20 million views in just 5 days
Five days after fugitive liquor baron Vijay Mallya, who has been criticised for alleged fraud and loan defaults, created a buzz through a video podcast with Raj Shamani, the founder of the now-defunct Kingfisher Airlines, on Tuesday, expressed gratitude for the 'overwhelming' response to the video. The podcast aired on June 5 had garnered over 20 million views. 'To say that I am humbled and overwhelmed is well short of what I truly feel. A big heartfelt thank you to all those who took the time to watch my 4-hour-plus podcast with @rajshamani 20 million views on YouTube alone in 4 days, and god knows how many more reposts on Instagram and Facebook fills my heart with joy that my true factual story is being heard. May god bless you all,' he wrote on X. See the post here: To say that I am humbled and overwhelmed is well short of what I truly feel. A big heartfelt thank you to all those who took the time to watch my 4 hour plus podcast with @rajshamani 20 million views on YouTube alone in 4 days and god knows how many more reposts on Instagram and… — Vijay Mallya (@TheVijayMallya) June 9, 2025 Mallya, who has been living in the United Kingdom since March 2016, had said in the podcast that he would 'seriously consider' returning to India if he is assured of a fair trial and a dignified existence in his home country. With nearly a million views, Mallya's latest post quickly gained traction and prompted mixed reactions. 'You deserve justice. Let's see when GOI support you. Good luck,' a user wrote. 'If you are really innocent a toy claim, hire the best lawyer, approach SC, and get a clean chit. You can then come back proudly with your head held high,' another user commented. 'You will always be remembered as a clown. That podcast had zero impact on mature people, only underage RCB fans might have believed it,' a third user reacted. A key accused in a major bank loan default case involving over Rs 9,000 crore linked to the Kingfisher Airlines, Mallya fled from India in 2016. He faces serious allegations of cheating, criminal conspiracy, money laundering, and the misuse of loan funds provided by a union of Indian banks, led by the State Bank of India (SBI). His companies are under probe by multiple agencies in India, including the Enforcement Directorate (ED), Central Bureau of Investigation (CBI), Serious Fraud Investigation Office (SFIO), and the Securities and Exchange Board of India (SEBI).
Economic Times
15 minutes ago
- Economic Times
India bonds see uptick, bulls enter after two-day drop
Indian government bond prices rose on Tuesday after two sessions of decline, with the 10-year bond yield at 6.686%. Traders expect continued consolidation amid a neutral stance from the Reserve Bank of India, which limits further rate cut expectations. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Indian government bond prices rose on Tuesday after a two-session decline, with traders expecting consolidation and mild value buying to persist through the yield on the benchmark 10-year bond was at 6.686% as of 9:45 a.m. IST, compared with its previous close of 6.2837% - the highest since May five-year 6.75% 2029 bond yield was at 5.8589% after ending at 5.8842% on Monday."We were expecting some reversal from the 6.30% level, but it seems like the market considers current levels to be decent to build fresh positions," a trader with a primary dealership yields jumped on Friday and Monday as markets were disappointed by the central bank's shift in stance to "neutral", signalling limited scope for rate cuts, after it delivered an outsized 50-basis point Reserve Bank of India also slashed lenders' cash reserve ratio by 100 bps, which is expected to add to the liquidity central bank has cut rates by 100 bps so far this year and is likely to pause this fiscal, according to a Reuters poll of some investors believe that the RBI 's rate cut cycle is over, ANZ , MUFG and Nomura expect at least one more reduction in 2025. RATES Shorter duration overnight index swap ( OIS ) rates were not yet traded but are expected to remain steady with a receiving one-year OIS rate ended at 5.48% on Monday, while the two-year OIS rate closed at 5.47%. The most liquid five-year was little changed at 5.69%.
Mint
16 minutes ago
- Mint
ITR requirements for personal loans: 1, 2 or 3 years? Know what banks want
Indian borrowers applying for a personal loan must typically submit proof of income. Salaried applicants usually provide recent salary slips and Form 16 (annual salary certificate), whereas self-employed borrowers show tax documents. In practice, salaried customers generally meet banks' criteria with the latest payslips/Form 16, while self-employed applicants are expected to furnish Income Tax Returns (ITRs) for multiple years. Still, there is no such fixed unanimous rule according to which loan applicants are required to definitely provide a certain number of ITR filings to every bank to be eligible for a particular loan product. Major lenders on the other hand have clear guidelines and regulations according to the specific loan products availed and the type of applicant that applies i.e., if the individual is self employed or salaried: For example, SBI asks for the latest filed ITR (one year) or Form 16, whereas ICICI, HDFC and Kotak Mahindra Banks generally expect ITRs for the past two financial years when verifying income from applicants. Banks require income proof to check repayment capacity. For salaried individuals, recent salary certificates and Form 16 usually suffice. SBI's policy explicitly mentions the latest ITR/Form 16 (covering one fiscal year) as mandatory documentation, but waives it if the borrower is in a nil-tax slab. By contrast, self-employed individuals must document earnings with filed ITRs for stability. In most cases, banks ask for at least two years of ITRs (along with audited accounts or Form 16 where ever applicable) to assess the business income, financial stability and continuity of the loan applicant. Salaried applicants: For all salaried borrowers, recent pay slips or salary slips usually work. ITRs may be required to be submitted but they are optional if your income is tax exempt. Self employed applicants: Banks use ITRs to assess and understand your income history, credit history, credit score, future repayment potential and business health. Most lenders prefer at least two years of filings. Note: In their own interest, aspirational loan applicants are advised to refer to the official website of their respective lending institution for complete details on the documents required for each loan product. Bank Salaried applicants Self-employed applicants State Bank of India Latest ITR or Form 16 (Waived for nil-tax slab) Latest ITR or Form 16 (One year) ICICI Bank Salary slips and/or Form 16 ITRs for last 2 financial years HDFC Bank Latest salary slips and Form 16 ITRs for last 2 years Kotak Bank Salary slips for last 3 months ITRs for last 2 financial years Axis Bank Last 3 months' payslips, Form 16 Last 2 years ITR IndusInd Bank Last 3 months' payslips, Form 16 Last 2 years ITR Note: The table of documents required is illustrative in nature, for the updated terms, conditions and documents required refer to the official website of your respective lender and always check the latest bank rules. Therefore, while salaried individuals mainly rely on salary certificates, self-employed borrowers should be ready with two years of ITR documents for most top banks. Meeting these requirements helps ensure smooth loan processing. Applicants are encouraged to maintain accurate tax filings and use digital loan portals responsibly. Borrow responsibly and consider using online tools for quick personal loan applications, but always check each bank's updated document checklist before applying. Disclaimer: Mint has a tie-up with fintechs for providing credit; you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit scores. Mint does not promote or encourage taking credit, as it comes with a set of risks such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit.
