US-India trade deal slashes auto component tariffs to boost exports
The US and India have agreed to cut tariffs on Indian-made auto components. The move reduces duties from 50% to 18%, marking a shift in trade policy between the two nations. Both countries have also pledged to lower further barriers in the coming years.
The tariff reduction follows a decision by former US President Donald Trump. His administration lowered duties on Indian automotive products, easing costs for exporters. This change is expected to strengthen trade ties and improve market access for Indian manufacturers.
Indian firms already supply a significant share of auto parts to the US. Tata Motors earns nearly a quarter of its revenue from the American market. Other major players like Sona BLW (40%), Ramkrishna Forging (27%), and Bharat Forge (25%) also rely heavily on US sales.
The new trade terms aim to create a more stable business environment. Companies can now plan long-term investments with greater confidence. Reduced tariffs are also set to enhance export competitiveness and accelerate growth in the sector.
A more balanced trade framework could unlock further opportunities. Supply-chain integration is expected to deepen, while technology partnerships may develop faster. Advanced manufacturing investments could also increase as a result.
The tariff cut will likely benefit India's auto and components industries. Lower duties improve cost predictability and encourage more exports to the US. Both nations have also committed to reducing additional trade barriers over time.
