The 50% U.S. tariff is expected to have a severe impact on the Indian auto parts industry, which exports products worth $6.6 billion to the U.S. market. According to industry estimates, the tariff will make Indian components costlier and more difficult to compete with rivals from China and South Korea. The industry is now turning to new markets, particularly in the European Union, and focusing on producing future-ready products, such as electric vehicle (EV) components.
According to Pratik Kamdar, a co-founder of Neuron Energy, the tariff will force Indian manufacturers to find new supply chains, as U.S. buyers will find it challenging to source products in the near term. The article notes that while the new tariffs are a “significant setback,” India’s diversified export base, strong services sector, and large domestic market provide the foundation to withstand the storm.