New Delhi, Feb 14 US President Donald Trump’s reciprocal tariffs will not have any major impact on Indian automotive manufacturers. Analysts say these companies sell their products mainly in the fast-growing domestic market, so the impact of Trump’s tariffs will be less on automotive manufacturers.
Puneet Gupta, Director, S&P Global Mobility ‘India & ASEAN’, said, “OEMs (original equipment manufacturers) are largely protected due to heavy localization and sales and minimal US exports.”
He said, “India is also the preferred partner of the US and the only option for US automakers other than China for auto components.”
Royal Enfield, the bike-making arm of Eicher Motors Ltd, may be an exception as the US is a major export market for its 650 cc motorcycles.
Some auto component manufacturers may also be affected due to high tariffs.
Last Thursday, Trump ordered his administration to consider imposing reciprocal tariffs on several trading partners.
According to a Morgan Stanley report, the direct impact of reciprocal tariff hikes by the US will be manageable, but the indirect impact on business confidence through uncertainty is more worrisome.
However, domestic policy will remain supportive of growth and more measures will be taken progressively if downside risks emerge.
Prime Minister Narendra Modi and US President Trump in their joint statement have pledged to expand trade and investment to make their citizens more prosperous, nations more robust, economies more innovative and supply chains more resilient.
To this end, the leaders set a bold new goal for bilateral trade – “Mission 500” – which aims to more than double total bilateral trade to $500 billion by 2030.
The two leaders committed to promoting opportunities for US and Indian companies to make greenfield investments in high-value industries in each other’s countries.
In this regard, the leaders welcomed investments of about $7.35 billion by Indian companies.
