US tariff relief unlikely for Indian auto parts makers despite Democrats’ Congress sweep

New Delhi: Auto component makers don’t expect a major relief on US tariffs near-term as President Donald Trump retains the power to veto any Democrats’ move to challenge his policies in the Congress.

“The general understanding is the President can exercise his veto power in matters of foreign policy and tariffs to block legislation passed by the Democrats in the Congress,” said a senior industry executive, asking not to be named. “Democrats can overturn a presidential veto if they have two-thirds majority in each house. So, there is unlikely to be any major change in tariffs on auto components imported into the US from India unless trade talks move forward and the India-US Bilateral Trade Agreement gets finalised.”

Trade talks with the US came to a standstill earlier this year with Trump threatening to impose 100% tariffs on India for importing Russian oil. The President has since altered his stance and permitted crude imports from Russia into the US to contain inflation.


“With the Democrats now gaining control of the House and the Senate, there could be some softening of stance,” said a second industry executive. “He (Trump) may be under pressure to conclude the trade talks with India quickly, which can then provide some relief.”

The US is the single-largest market for Indian auto parts, accounting for 26% of the country’s overseas shipments. India’s total auto parts exports reached $24 billion in FY26, per data from Automotive Component Manufacturers Association (ACMA).

Nearly half of the auto parts exported from India to the US attract 50% tariff, and the rest 25%. Tariffs on Indian imports into the US stood at about 2% prior to the revisions by the Trump administration.

In an interview with Fox News, Trump described the veto as one of the strongest powers available to a US president. "It's been done before, as you know, numerous times,” he said. “It's the power of veto — it's one of the stronger powers that a President has. They'll send over things that are insane and I'll veto them.”

Congress can override a presidential veto, but it requires a two-thirds majority in both the House of Representatives and the Senate. This means that even if Trump rejects a bill passed by Congress, lawmakers can still make it law if enough members vote to pass it again.

With all seats voting, a two-thirds majority would require 290 votes in the 435-member House of Representatives and 67 votes in the 100-member Senate to override the President's veto. For Democrats, this would mean securing support from a significant number of Republican lawmakers in both chambers if they don’t have the required two-thirds majority themselves.

The development comes even as the Office of the US Trade Representative (USTR) initiated a probe into alleged unfair practices followed by auto parts exporters from India earlier this year. The investigation under Section 301 is being undertaken on two counts—using unfair labour practices, and creation of excess capacities backed by government subsidies.

Components on which the 25% rate is levied are currently under investigation by the Office of USTR. There has not been any decision or resolution of the matter so far.