New Delhi, March 27 – The recent announcement by U.S. President Donald Trump to impose a 25 percent import duty on completely built vehicles (CBUs) and automotive components is expected to have limited impact on India’s automotive industry, according to the Global Trade Research Initiative (GTRI). As per agency report, the new tariffs will be implemented starting April 3, 2025.
Ajay Srivastava, founder of GTRI, noted that a review of India’s export data for the automotive sector in calendar year 2024 indicates minimal exposure to the United States. India exported only USD 8.3 million worth of passenger cars to the U.S., accounting for just 0.13 percent of the country’s total automobile exports of USD 6.98 billion.
Truck exports to the U.S. were also minimal, totaling USD 12.5 million, or just 0.89 percent of India’s global truck exports, further reinforcing the notion that India’s thriving automobile export business is unlikely to be significantly affected by the new tariffs.
However, GTRI did flag potential concerns in the category of chassis fitted with engines. In this segment, India exported USD 246.9 million globally, with the U.S. accounting for USD 28.2 million or approximately 11.4 percent.
The largest area of U.S. exposure remains in automotive parts and components. India exported components worth USD 2.2 billion to the U.S. in 2024, representing 29.1 percent of India’s global exports in this category. Although this might seem significant at first glance, Srivastava emphasized that the impact should be viewed in context.
Globally, the U.S. imported automotive components worth USD 89 billion last year, with Mexico accounting for USD 36 billion, China USD 10.1 billion, and India only USD 2.2 billion. Since the new 25 percent duty applies to all exporting nations, the playing field remains level.
In this light, Srivastava pointed out that India may actually benefit from this situation. With its competitive labor-intensive manufacturing and favorable import tariff structure (ranging from zero to 7.5 percent), India is well-positioned to expand its market share in the U.S. over time.
He further stated that rather than reacting with retaliatory measures, the Indian government should view the tariff decision as a neutral or even marginally beneficial development for the long term.
