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Time of India
3 days ago
- Automotive
- Time of India
Tariff Shock: $7 bn India–US auto parts trade braces for big impact
The US's new tariffs on Indian auto components are set to cause immediate disruption, with analysts and industry experts warning that 15-20 per cent of India's exports to its largest auto-parts market could be lost in the short term, ToI reported. The US accounts for 27 per cent of India's auto component exports, meaning around 8 per cent of the country's total production will be directly affected, said Jitin Makkar, group head and senior vice-president (corporate ratings) at ICRA . According to the Automotive Component Manufacturers Association (ACMA), exports to the US stood at nearly $7 billion in 2024. Of this, $3.6 billion worth of parts and components for cars and small trucks will now attract a 25 per cent duty. The bigger hit will come from the remaining $3 billion, which includes commercial vehicle parts, construction equipment components, off-highway machinery, and tractor and farm equipment parts, all of which will face a reciprocal tariff of 50 per cent. While larger original equipment manufacturers are already exploring alternative markets, the impact will be most severe for small and medium-sized enterprises (SMEs) that make up the bulk of the sector. Noble Cast Comp, an aluminium casting manufacturer in Bhosari, sends 60 per cent of its products to the US. Its chairman and managing director, Nitin Bhagwat, said American customers were already asking the company to share the tariff burden, which would squeeze profit margins. In Pimpri Chinchwad, R K Industries exports computer numerical control machined components to global auto firms, with 20 per cent of its shipments going to the US. 'Effects are expected to be felt from next month, with US customers likely seeking price reductions due to increased landing costs and clients may also explore alternative suppliers from countries with lower costs,' said the company's operations head, Nilesh Khaire. The effective duty rates will range from 25-28 per cent to 45-50 per cent, depending on the product category, and the extent of the impact will vary based on how essential the exported component is. Ravindra Patki, managing partner at Vector Consulting Group, said, '30-40 per cent of India's auto component exports to the US comes from programmes in which India is one of multiple approved suppliers with a defined share of business.' For larger exportable parts, Indian suppliers will be at a disadvantage compared with exporters from countries such as Japan, Vietnam and Indonesia, which face lower tariffs of 15-19 per cent. Component makers say much will depend on their individual ties with US buyers. Sipra Engineering managing director M Umadi said, 'US customers, accounting for 28-32 per cent of exports, have assured support if we maintain cost, quality and delivery standards, but may request cost reductions later.'
Time of India
3 days ago
- Automotive
- Time of India
Tariff Shock: $7 bn India–US auto parts trade braces for big impact
US tariffs on Indian auto components threaten to disrupt exports, potentially costing India 15-20% of its auto-part exports to the US. SMEs, which form the bulk of the sector, will be severely affected. While larger manufacturers explore alternative markets, smaller firms face pressure from American clients to absorb tariff costs, squeezing profit margins. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads The US's new tariffs on Indian auto components are set to cause immediate disruption, with analysts and industry experts warning that 15-20% of India's exports to its largest auto-parts market could be lost in the short term, ToI reported. The US accounts for 27% of India's auto component exports, meaning around 8% of the country's total production will be directly affected, said Jitin Makkar, group head and senior vice-president (corporate ratings) at ICRA According to the Automotive Component Manufacturers Association (ACMA), exports to the US stood at nearly $7 billion in 2024. Of this, $3.6 billion worth of parts and components for cars and small trucks will now attract a 25% duty. The bigger hit will come from the remaining $3 billion, which includes commercial vehicle parts, construction equipment components, off-highway machinery, and tractor and farm equipment parts, all of which will face a reciprocal tariff of 50%.While larger original equipment manufacturers are already exploring alternative markets, the impact will be most severe for small and medium-sized enterprises (SMEs) that make up the bulk of the sector. Noble Cast Comp, an aluminium casting manufacturer in Bhosari, sends 60% of its products to the US. Its chairman and managing director, Nitin Bhagwat, said American customers were already asking the company to share the tariff burden, which would squeeze profit Pimpri Chinchwad, R K Industries exports computer numerical control machined components to global auto firms, with 20% of its shipments going to the US. 'Effects are expected to be felt from next month, with US customers likely seeking price reductions due to increased landing costs and clients may also explore alternative suppliers from countries with lower costs,' said the company's operations head, Nilesh effective duty rates will range from 25-28% to 45-50%, depending on the product category, and the extent of the impact will vary based on how essential the exported component is. Ravindra Patki, managing partner at Vector Consulting Group, said, '30-40% of India's auto component exports to the US comes from programmes in which India is one of multiple approved suppliers with a defined share of business.'For larger exportable parts, Indian suppliers will be at a disadvantage compared with exporters from countries such as Japan, Vietnam and Indonesia, which face lower tariffs of 15-19%.Component makers say much will depend on their individual ties with US buyers. Sipra Engineering managing director M Umadi said, 'US customers, accounting for 28-32% of exports, have assured support if we maintain cost, quality and delivery standards, but may request cost reductions later.'(with ToI inputs)
Time of India
4 days ago
- Automotive
- Time of India
Auto parts makers gear up for profit squeeze
What do the new tariffs by the US mean for India's auto component exporters? The math is complicated but the pinch is very real. According to auto analysts and industry experts, 15-20 per cent of India's US-bound auto-component exports could be lost in the short term. The US is India's biggest exporting destination with 27 per cent of auto parts exported there. Which means, says Jitin Makkar, group head & senior VP (corporate ratings) at ICRA, 'around 8 per cent of the Indian auto-component production will be impacted by the increase in tariffs'. According to ACMA auto component exports to the US stood at nearly $7 billion in 2024. Of this, $3.6 billion — which covers parts and components for cars and small trucks — will attract 25 per cent duty. But the real squeal will be in the balance $3-billion worth of exports that are part of a reciprocal tariff of 50 per cent. This would include commercial vehicle parts, construction equipment components, off highway, tractor and farm equipment parts. While large OEMs are already looking at alternative markets, it is the sector mainstay MSME exporters that will hurt most. Take Noble Cast Comp, an aluminium casting manufacturer in Bhosari, that exports 60 per cent of its products to the US. The company's CMD Nitin Bhagwat said US customers were already demanding that they share the tariff burden, which would affect profit margins. Others like R K Industries in Pimpri Chinchwad exports computer numerical control machined components to global auto firms, with 20 per cent going to the US. 'Effects are expected to be felt from next month, with US customers likely seeking price reductions due to increased landing costs and clients may also explore alternative suppliers from countries with lower costs,' said R K Industries's operations head Nilesh Khaire. While the effective duty can range anywhere from 25-28 per cent to 45-50 per cent depending on the different slabs, the pinch will differ on the basis of how sticky the product exported is. Ravindra Patki, managing partner at Vector Consulting Group said, '30-40 per cent of India's auto component exports to the US comes from programmes in which India is one of multiple approved suppliers with a defined share of business.' As for the larger exportable parts, Indian auto-component exporters will be at a disadvantage compared to other Asian countries like Japan, Vietnam and Indonesia which face a lower tariff of 15-19 per cent. Component exporters however say a lot will depend upon their individual relationship with US-based buyers. Sipra Engineering MD M Umadi said, 'US customers, accounting for 28-32 per cent of exports, have assured support if we maintain cost, quality and delivery standards, but may request cost reductions later.'
Time of India
4 days ago
- Automotive
- Time of India
Auto parts makers gear up for profit squeeze
CHENNAI: What do the new tariffs by the US mean for India's auto component exporters? The math is complicated but the pinch is very real. According to auto analysts and industry experts, 15-20% of India's US-bound auto-component exports could be lost in the short term. The US is India's biggest exporting destination with 27% of auto parts exported there. Which means, says Jitin Makkar, group head & senior VP (corporate ratings) at ICRA, "around 8% of the Indian auto-component production will be impacted by the increase in tariffs". According to ACMA auto component exports to the US stood at nearly $7 billion in 2024. Of this, $3.6 billion - which covers parts and components for cars and small trucks - will attract 25% duty. But the real squeal will be in the balance $3-billion worth of exports that are part of a reciprocal tariff of 50%. This would include commercial vehicle parts, construction equipment components, off highway, tractor and farm equipment parts. While large OEMs are already looking at alternative markets, it is the sector mainstay MSME exporters that will hurt most. Take Noble Cast Comp, an aluminium casting manufacturer in Bhosari, that exports 60% of its products to the US. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Are you ready to conquer a planet? Undo The company's CMD Nitin Bhagwat said US customers were already demanding that they share the tariff burden, which would affect profit margins. Others like R K Industries in Pimpri Chinchwad exports computer numerical control machined components to global auto firms, with 20% going to the US. "Effects are expected to be felt from next month, with US customers likely seeking price reductions due to increased landing costs and clients may also explore alternative suppliers from countries with lower costs," said R K Industries's operations head Nilesh Khaire. While the effective duty can range anywhere from 25-28% to 45-50% depending on the different slabs, the pinch will differ on the basis of how sticky the product exported is. Ravindra Patki, managing partner at Vector Consulting Group said, "30-40% of India's auto component exports to the US comes from programmes in which India is one of multiple approved suppliers with a defined share of business." As for the larger exportable parts, Indian auto-component exporters will be at a disadvantage compared to other Asian countries like Japan, Vietnam and Indonesia which face a lower tariff of 15-19%. Component exporters however say a lot will depend upon their individual relationship with US-based buyers. Sipra Engineering MD M Umadi said, "US customers, accounting for 28-32% of exports, have assured support if we maintain cost, quality and delivery standards, but may request cost reductions later." Stay informed with the latest business news, updates on bank holidays , public holidays , current gold rate and silver price .
