Trump imposes 25% tariff: Indian auto suppliers may lose edge in US market
India’s auto component industry faces a fresh challenge as the U.S. announces a 25% tariff and unspecified penalty on Indian exports. This move could dent competitiveness and margins for key players reliant on the American market.
- Jul 30, 2025,
- Updated Jul 30, 2025 10:04 PM IST
Trump’s announcement of a 25% tariff and penalty on India is likely to put pressure on the margins of domestic auto component makers who export to the US, a key market. Several automakers, such as Sundram Fasteners, Sona Comstar, and Samvardhana Motherson, identify the US as a key market.
“The 25% tariff announced by the U.S. could create real challenges for India’s auto component exporters, especially those with strong ties to the American market. Companies like Sundram Fasteners, Motherson, and Sona Comstar may face pressure on pricing and margins. These firms supply key parts like drivetrains, fasteners, and EV components to global carmakers, and higher tariffs make them less competitive compared to suppliers in Mexico or Canada, who benefit from zero-duty access under USMCA. Japan has also managed to cap its tariffs at a lower rate, giving its exporters an edge,” says Nikhil Dhaka, Vice President, Primus Partners.
The US continues to be the largest export market for domestic auto component manufacturers. In FY25, North America accounted for 32% of auto component exports, which saw an increase of 8.4%. Top export categories included drive transmission & steering, engine components, suspension, braking, and body/chassis parts.
“While the overall exposure to the U.S. market isn’t very large for all players, the move could still affect business sentiment and growth plans. It may also push Indian companies to focus more on markets like Europe or Southeast Asia. More importantly, this is a reminder that moving up the value chain with higher-tech products is now essential,” says Dhaka.
Trump’s announcement of a 25% tariff and penalty on India is likely to put pressure on the margins of domestic auto component makers who export to the US, a key market. Several automakers, such as Sundram Fasteners, Sona Comstar, and Samvardhana Motherson, identify the US as a key market.
“The 25% tariff announced by the U.S. could create real challenges for India’s auto component exporters, especially those with strong ties to the American market. Companies like Sundram Fasteners, Motherson, and Sona Comstar may face pressure on pricing and margins. These firms supply key parts like drivetrains, fasteners, and EV components to global carmakers, and higher tariffs make them less competitive compared to suppliers in Mexico or Canada, who benefit from zero-duty access under USMCA. Japan has also managed to cap its tariffs at a lower rate, giving its exporters an edge,” says Nikhil Dhaka, Vice President, Primus Partners.
The US continues to be the largest export market for domestic auto component manufacturers. In FY25, North America accounted for 32% of auto component exports, which saw an increase of 8.4%. Top export categories included drive transmission & steering, engine components, suspension, braking, and body/chassis parts.
“While the overall exposure to the U.S. market isn’t very large for all players, the move could still affect business sentiment and growth plans. It may also push Indian companies to focus more on markets like Europe or Southeast Asia. More importantly, this is a reminder that moving up the value chain with higher-tech products is now essential,” says Dhaka.