India-US trade deal: Pact puts auto parts exporters in driver's seat

NEW DELHI: India's auto component industry is set for a significant boost following the India-US trade deal, with the agreement providing preferential tariff treatment for Indian auto parts exports, including zero-duty access for some products.

The joint statement said India will receive a preferential tariff rate quota for automotive parts currently covered under US national security tariffs, creating a pathway for Indian exporters to access the US market at lower or zero duties. They had previously been affected due to steep tariffs with certain auto components facing duties up to 50%.




Vikrampati Singhania, president of the Automotive Component Manufacturers Association (ACMA), said the move signals a clear intent to strengthen bilateral manufacturing and supply chains. "These measures will lead to enhanced export competitiveness, deepen technology collaboration, and reinforce India's role as a trusted partner in resilient global automotive supply chains."

Auto component maker Uno Minda said the agreement opens a new phase of export-led growth for the sector. "For Uno Minda, this opens up compelling opportunities to further scale our footprint, strengthen supply-chain agility and expand our contribution to the US market while proudly reinforcing India's position as a world-class manufacturing hub," said Ravi Mehra, MD at Uno Minda.

Tenneco India said the reduction in US tariffs will significantly improve the cost competitiveness of India-made components. "This will significantly enhance the cost competitiveness of our premium products like shock absorbers and exhaust systems in the US market, positioning us to grow our presence, scale volumes, and strengthen integration within the supply networks of American OEMs," said Arvind Chandra, whole-time director and CEO, Tenneco India.

Bharat Forge described the deal as a "game changer" for Indian industry, adding that it strengthens India's position in global supply chains.

In 2024-25, exports to the US were to the tune of $6.2 billion, while in the first half of this year, it has reached $3.1 billion, according to ACMA.