The recent decision by US President Donald Trump to impose a total 50% tariff on Indian goods from August 27, 2025, is expected to severely impact India’s automobile industry, particularly its auto parts exports. India currently exports auto parts worth about $7 billion (approximately Rs 61,000 crore) annually to the United States, which accounts for 32% of India’s total auto parts exports, making the US the largest importer of these products.

With the tariff doubling from 25% to 50%, Indian auto parts could lose significant price competitiveness in the American market, potentially cutting exports nearly in half. This would not only reduce revenues but also jeopardize many Indian auto parts manufacturers’ orders and could lead to job losses in the sector.

At present, India applies a comparatively low customs duty of 5-15% on auto parts imported from the US. The US imposing much higher tariffs on Indian products could deepen trade imbalances and disrupt supply chains that Indian companies rely on.

Industry experts warn that prolonged tariff implementation could hurt domestic manufacturers, forcing businesses to rethink strategies for exports, diversify markets, or increase local production capabilities to mitigate adverse effects.

Overall, this tariff escalation signals challenging times ahead for India’s auto parts industry, highlighting the urgency for innovation and competitive improvement to weather the trade tensions.