Auto Component Industry Faces Major Revenue Setback:

Indian auto component manufacturers could see up to ₹4,500 crore in revenue losses this fiscal, as US tariffs threaten to impact their overseas shipments, warns ratings firm Icra.

Tariff Impact Slows Down Growth Projections:

Icra predicts that industry growth, which was once expected to be 8-10%, will now slow down to just 6-8% by FY2026. This dip stems from the sharp drop in US exports caused by tariff hikes.

A Heavy Cost Burden on the Supply Chain:

The steep 25% tariff on key automobile parts like engines and transmissions, imposed by the US on March 26, 2025, will add an extra ₹9,000 crore to the global supply chain costs. This cost will mainly be passed on to US consumers, importers, and Indian exporters.

How Will Indian Suppliers Handle the Cost?

Although Indian auto suppliers are expected to pass on most of the costs, some may absorb 30-50% of the additional tariffs. This could mean an earnings hit of ₹2,700 to ₹4,500 crore, severely affecting operating profits.

Is the US Really Worth the Risk?

Exports to the US make up only 8% of India's auto component industry revenue, yet the growing tariff threat is a significant blow to future growth, especially as 65% of India’s exports face new tariffs.