New Delhi, April 1 The share of exports in India’s automotive production stands at just 15 per cent, which means the exposure of domestic component manufacturers to the US is small at 4.2 per cent which would shield the revenue of component makers in the country, a Crisil Intelligence report said on Tuesday.
According to the report, accounting for the components under tariffs, the exposure of Indian companies would whittle down further to 3.5 per cent of the annual revenue from auto components, thus limiting impact.
“This limited exports to the US will shield the revenue of component makers,” the report mentioned.
The Donald Trump Administration in the US has announced a 25 per cent tariff on imports of automobiles and some components to protect its industry, supply chains and national security.
The new tariffs will apply from April 3 on imports of passenger vehicles (PVs), light trucks and a date to be announced but not later than May 3, 2025 on components such as engines, transmissions, powertrain parts and electricals.
In fiscal 2024, India’s exports of PVs and commercial vehicles (CVs), as a percentage of overall production, stood at 15 per cent and 8 per cent, respectively, while the share of the US in these exports was relatively small at 0.21 per cent and 3 per cent, respectively.
For passenger cars and light trucks, majority of Indian exports are to the Middle Eastern, African and Latin American countries, such as Saudi Arabia, UAE, South Africa, Mexico and Chile.
“After the exit of General Motors and Ford from India, no US major had an Indian manufacturing base for exporting back to their country. Given the meagre share of India’s exports of PVs and CVs to that country, the tariffs imposed would have minimal impact on original equipment manufacturers (OEMs) here,” said the report.
India’s share of auto component exports to the US is significant at 28 per cent.
Within this, powertrain parts, transmissions, engines, and electricals account for 40 per cent, 29 per cent, 13 per cent and 2 per cent, respectively. Cumulatively, they account for 84 per cent of all automotive component exports from India to the US.
However, a potential reduction in the competitiveness of domestic component makers because of increased prices in the US will have a bearing, said the report.
This impact on India and some other countries would, in turn, benefit Mexico and Canada, which are covered under the USMCA and account for 46 per cent of overall imports to the US, it added.
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