India's $80 bn automobile components industry hunts new roads as Trump tariff hits exports

Manesar, a key hub of India’s automobile industry along with Chennai and Pune, is preparing for the hit from the new 50% tariff regime. However, unlike garment exporters, auto component makers are not facing a uniform 50% duty, leaving them with some scope for relief.

Jagdeep Rangar of Stork Rubber Product, which makes engine mounts, rubber bushes, high voltage polymer insulators, etc, said auto component exports to the US can be categorised into two parts - supplies to light trucks and passenger vehicles, which have a 27.5% tariff and will continue to be so, and components for marine, agriculture (like tractors), heavy trucks, heavy machines and cranes that face a 50% tariff. Though it's the latter that will take the bigger hit, TOI sources said the impact will be felt across ancillaries because the same companies often manufacture parts in both categories.

ALSO READ: Raghuram Rajan urges India to reconsider Russian oil buys like Trump wants


"We are hoping to get some relief from govt, otherwise we will not be able to absorb the kind of discounts being demanded by buyers," said Rangar, adding finding new markets is not easy as developing a new product is a long process with a lead time of around two years. "Auto components are not developed overnight. We have to invest in tooling, send samples for testing. There are many more steps before the product is fit for the market," Rangar told Times of India, describing the current situation as "a flux".

Vinnie Mehta, director-general of Automotive Component Manufacturers Association of India(ACMA), said auto components exports to the US in 2024 stood at $6.6 billion. "Of this, $3.5 billion worth of export will continue to be at 25%. This covers parts and components for cars and small trucks covered under US Proclamation 10908 dated March 26, 2025. This is about 55% of our export to the US. The remaining will attract a 50% tariff."

India's automotive component industry is worth around $80 bn, out of which $23 bn is exports and the US share is around 8-9%, added Mehta. "It is too early to comment on the gravity of the impact. EU is also a $7-billion market."

Nitin G R, founder of auto accessories maker GrandPitstop, said the company is trying to find ways to overcome the shock. "We are exploring ways to reach the US market with a lower tariff burden. Re-routing shipments through third countries is an option under consideration." An industry insider said many companies have already started work on diversifying their client base in other countries. "Indian companies are looking to expand in the Middle East, Africa and Latin America." Shradha Suri Marwah, president of ACMA, said: "While this development presents near-term headwinds, it also underscores the importance of enhancing competitiveness, strengthening value addition, and exploring new markets."

(With TOI inputs)