NEW DELHI: Automakers in the United States are deferring new orders from Indian auto component manufacturers after President Donald Trump raised tariffs on Indian goods to 50%, one of the highest rates applied for any nation, last year. ACMA President-designate and managing director (MD) of Brakes India Sriram Viji said higher tariffs imposed by the US on several countries, including India, have created uncertainty among buyers.
Viji stated that while existing components trade with the US may continue in the near term, the bigger concern lies in future orders. He added that India faces a disadvantage as some countries have secured more favourable tariff terms under US trade rules.
Viji is hopeful that a resolution will be reached soon. Since the higher tariff rates were first announced last year, India has held multiple rounds of negotiations with the US for a trade agreement. However, nothing has materialised yet.
September 2025 was the first full month of Trump’s 50% tariffs on Indian goods. This includes a 25% penalty for India’s refusal to stop buying oil from Russia. Vikrampati Singhania, President of ACMA and Managing Director of J K Fenner (India) Ltd, said that new contracts from the US are in limbo even as existing supply chains continue. He added that the depreciation of the Indian rupee versus the US dollar has cushioned some of the impact.
Meanwhile, the Indian auto component industry grew by 6.8% to Rs. 3.56 lakh crore (USD 41.2 billion) in the first half of the financial year 2026 (H1 FY26) compared to the same period last year, supported by stable domestic demand, a resilient aftermarket and continued investments in capacity expansion.
According to the Automotive Component Manufacturers Association (ACMA), sales to original equipment manufacturers (OEMs) rose by 7.3% to Rs. 3.04 lakh crore (USD 35.2 billion) during the period, led primarily by the passenger vehicle and LCV segments. The aftermarket recorded a growth of 9% clocking Rs 53,160 crore (USD 6.1 billion), driven by an expanding vehicle parc, increasing formalisation of the repair and maintenance ecosystem and deeper penetration of organised channels.
On the external trade front, exports of auto components grew by 9.3% to USD 12.1 billion, while imports increased by around 12.5% to USD 12.3 billion, resulting in a trade deficit of USD 180 million, compared to a surplus of USD 150 million in H1FY25. The United States and Germany remained among the top export destinations, while China, Japan and Germany continued to be the leading sources of imports.
Vinnie Mehta, Director General, ACMA, said, “H1FY26 performance reflects the underlying strength of India’s automotive ecosystem, with growth across OEM supplies and the aftermarket. On the trade side, export growth has remained healthy, though imports have risen at a faster pace, leading to a marginal trade deficit.“