Latest tariffs to impact half of auto component exports to US

President Donald Trump's decision to raise tariff on imports from India to 50% is set to impact nearly half of the country's $7-billion, or about ₹61,000-crore, annual auto parts exports to the US, senior industry executives said.

The US was already levying a 25% duty on cars, small trucks and their parts from all countries since May 3, while the tariff on components for commercial vehicles, earth-moving equipment and tractors was 10%, a senior executive told ET.

This will now rise to 50%.


"While the tariffs levied this year now impacts component exports across categories, today's announcement specifically will hit nearly half of the total exports business to the US," the executive said.

The US is the largest destination for Indian auto parts, accounting for about 32% of total shipments from the country in FY25.

India does not export vehicles to the US.

India levies customs duty of 5-15% on auto parts imported from the US.

Trump had initially said higher tariffs would push companies to set up manufacturing in the US, creating jobs.

His latest move, however, comes in retaliation to India's oil imports from Russia.

He claimed Indian oil imports from Russia are undermining US National Security and foreign policy amid the ongoing national emergency related to Russia's actions in Ukraine.