NEW DELHI/ WASHINGTON D.C: In a decisive shift in global trade policies, U.S. President Donald Trump has announced the implementation of “reciprocal tariffs” from April 2, 2025, targeting major trade partners, including the European Union, China, India, Mexico, and Canada. This policy aims to equalize tariffs imposed by these nations on American goods, particularly in the automotive sector. Trump has specifically pointed out that countries like China, South Korea, and India have maintained significantly higher tariff rates on U.S. products, particularly in auto components.
“If you don’t manufacture in America, you will pay a tariff—a significant one. Other countries have used tariffs against us for decades, and now it’s our turn,” President Trump stated, emphasizing the protectionist stance of his administration.
This move is expected to cause significant disruptions in global supply chains. While it may encourage domestic manufacturing within the U.S., it poses a challenge for export-heavy economies such as China, Germany, Japan, and India, which rely on access to the American market. India, which exported auto components worth $21.2 billion in FY2024, will have to pivot toward alternative markets in Latin America, Africa, and Southeast Asia to mitigate potential risks from these tariffs.
At the same time, India’s auto component industry is aggressively positioning itself as a global powerhouse. At the recently held 59th ACMA Excellence Awards & 10th AMF Technology Summit 2025 in New Delhi, the Automotive Component Manufacturers Association (ACMA), in collaboration with the Boston Consulting Group (BCG), unveiled an ambitious roadmap aiming to triple exports to $100 billion over the next 7-8 years. This strategic initiative underscores India’s intent to become a dominant force in the global auto supply chain.
Union Minister for Heavy Industries H.D. Kumaraswamy reinforced the government’s commitment to this vision during his visit to the International Centre for Automotive Technology (ICAT) in Manesar. He praised India’s progress in automotive innovation and safety standards, describing ICAT as a pillar of India’s growing technological capabilities. The government’s Production-Linked Incentive (PLI) scheme, designed to accelerate investment and growth in the sector, has already attracted proposals worth ₹75,000 crore, with ₹18,000 crore invested so far, generating over 30,000 new jobs. The minister also urged stakeholders to align with national guidelines under PM E-DRIVE, ensuring the sector’s long-term sustainability.
Industry leaders have echoed this confidence. Ms. Shradha Suri Marwah, ACMA President & CMD of Subros Ltd., emphasized that while government policies remain favorable, the industry must navigate geopolitical challenges and supply chain disruptions effectively. The global auto component trade, valued at $1.2 trillion, presents significant opportunities for India. Currently, India’s export share in key markets such as the U.S. and Europe stands at approximately 4.5%, indicating vast untapped potential. Notably, 80% of leading global Chief Procurement Officers (CPOs) are already sourcing from India or considering doing so, a strong vote of confidence in India’s manufacturing capabilities.
While Trump’s tariffs introduce a new era of economic nationalism, India’s auto industry remains well-positioned to adapt. The sector’s focus on diversifying export destinations, investing in next-generation technologies (such as EV batteries, ADAS, and smart automation), and securing stronger Free Trade Agreements (FTAs) with key economies will be critical in mitigating risks posed by U.S. protectionism.
As the global trade landscape undergoes realignment, India’s strategic vision, government-backed initiatives, and industry resilience offer a pathway to emerge not just unscathed but as a leader in the global automotive supply chain. The next five years will be a defining period, determining whether India can capitalize on these opportunities and solidify its position as an auto component manufacturing hub.
–Dr. Shahid Siddiqui; Follow via X @shahidsiddiqui
