Which Indian Companies Will Be Impacted by Donald Trump’s 25% Auto Tariff? | Know All Details

Indian Auto Industry Hits by Donald Trump’s 25% Tariff on Foreign Auto Imports
In a blockbuster move that has the potential to realign international auto trade, US President Donald Trump announced a 25 percent tariff on foreign auto imports. The move is likely to hit a number of Indian firms, including Tata Motors, Eicher Motors, Sona BLW, and Samvardhana Motherson, as per MoneyControl.

Impact on Indian Auto Companies

These companies ship automobile parts to major markets like Europe, Japan, South Korea, and China, which then supply cars to the US.

India’s largest carmaker Tata Motors does not export cars directly to the US. But its subsidiary Jaguar Land Rover (JLR) has a strong presence in the US market. As per JLR’s FY24 annual report, the US contributed 22 percent of its total sales. In FY24, JLR sold close to 400,000 vehicles across the globe, with the US being among its key markets. The majority of JLR vehicles sold in the US are made in the UK and other global plants, so they are affected by the new 25 percent tariff.

Eicher Motors, the parent firm of Royal Enfield motorcycles, is another Indian player that would be impacted. The US market is a significant one for its 650cc models, and they might have to raise prices in response to higher tariffs, affecting sales and expansion plans.

Samvardhana Motherson International Ltd, a major Indian auto components maker, also exports to dominant US automakers such as Ford and Tesla. Nevertheless, it has set up factories in America and Europe, which gives the company some shielding against import duty. This move sets it apart from companies, which depend primarily on exports.

Sona BLW Precision Forgings (Sona Comstar) is yet another large player in the Indian auto component industry. The company is engaged in the production of automotive systems and components like differential gears and starter motors. With nearly 66 percent of its revenues from the US and European markets, Sona BLW has been diversifying its export base aggressively. The firm hopes that Eastern markets like China, Japan, and South Korea will generate more than 50 percent of its revenue in the next five years, which will offset risks from Western trade uncertainties.

Some of the other important Indian component manufacturers with high export exposure are Bharat Forge, Sansera Engineering Ltd, Suprajit Engineering, and Balkrishna Industries. These companies can be negatively affected by the increased cost due to tariffs, which can negatively affect their business in the US and European markets.

India’s Global Auto Component Market Share

India, in the FY 2024, shipped automobile components valued at $21.2 billion into the $1.2 trillion global auto parts industry, holding a vital share. Deliveries to the largest importers in the world and the US, as well as Europe, worth about 4.5 percent of the value of the international trade, played a significant percentage.

Future Outlook

The 25 percent duty on foreign auto imports is a game-changer for Indian automakers, forcing them to re-evaluate their international plans. Export-diversified companies with localized manufacturing in major markets could be better equipped to ride out the blow. Export-oriented companies that are highly reliant on the US market could see higher costs, possible supply chain interruptions, and lower profit margins.

With changing global trade patterns, Indian auto component makers will have to look for new markets and enhance domestic production capacities to stay competitive in the global market.