After terming India’s import duty barriers high for some time, US President Donald Trump has expressed that 2 April 2025 will be remembered as the day the American industry was reborn as his government announced a broad new tariff policy that imposes at least a 10 percent duty on nearly all imports from certain countries. In the case of India, the policy speaks of 26 percent ‘discounted' reciprocal tariffs. The tariff on China, on the other hand, is 34 percent. 

Aimed at protecting American farmers and ranchers, according to Trump, the broad-based tariff policy is also being termed as ‘national emergency’ driven in view of the ongoing trade deficits, which hit a record USD 1.2 trillion in 2024.

The German auto industry has reacted to the US policy by stating that it 'will only create losers'. While the Asian stock markets have shrunk in response to the announcement, the Indian Ministry of Commerce is analysing the impact of the 26 percent ‘discounted’ tariff announcement. 
Mentioning in its statement that it understands the intent of the US administration to boost domestic manufacturing and address trade imbalances, the Indian auto components apex body ACMA (Automotive Component Manufacturers Association of India) has said that autos and auto parts as well as steel and aluminium articles are already subject to Section 232 tariffs at 25 percent announced earlier by the US President’s order on 26 March 2025. A detailed list of auto components that will be subject to 25 percent import tariff is awaited, it mentioned.

Shraddha Suri Marwah, President, ACMA and CMD, Subros Ltd, averred, “ACMA remains hopeful that the ongoing bilateral negotiations between the Indian and U.S. governments will lead to a balanced resolution that benefits both economies. We believe that the strong trade relationship between India and the United States, especially in the auto components sector, will encourage continued dialogue to mitigate the impacts of these measures. ACMA is committed to engaging with all stakeholders to ensure the long-term interests of the Indian auto component industry.”

Saurabh Agarwal, Partner and Automotive Tax Leader, EY India, observed, "With US automotive tariffs rising, India's electric vehicle sector has a prime opportunity to capture a larger share of the US market, especially in the budget car segment.” He drew attention to the fact that China's 2023 auto and component exports to the US stood at US$17.99 billion whereas India's were only US$2.1 billion in 2024, highlighting the potential for growth. “To accelerate this, the government should enhance the PLI scheme by including more auto components, opening it to new players, and extending it by two years,” he added. 

Mrunmayee Jogalekar, Auto and FMCG Research Analyst, Asit C Mehta Investment Interrmediates Ltd, expressed, “Certain sectors such as auto and auto ancillary, which are already subject to a separate 25 percent tariff announced in March are exempt to the levy of reciprocal tariffs. This means no additional tariffs will be imposed on this sector.”
Stating that other exempted segments include copper, pharmaceuticals, semiconductors, critical minerals and energy products, she informed,

“Since import duties apply to all trading partners, the extent of impact will vary across sectors and countries based on competitive advantages.” “For the Indian auto component industry, which derives around 30 percent of its revenue from exports, with 30 percent of that coming from the US, this could result in a potential hit on sales or profit margins,” she added. 

In FY2024, ACMA reported that India exported USS$ 6.79 billion worth of auto components to the US. It imported only USS 1.4 billion, resulting in a substantial trade surplus in India's favour. 

Against the backdrop of the broader tariff policy that speaks of a 26 percent duty of Indian exports to US, the discussion between Indian and the US regarding the bilateral trade agreement will assume importance as well as urgency. For US automotive companies to find their way to the Indian market despite their near cult status – the likes of Harley Davidson and Tesla – will only mean facing a competition that is stiffer than expected and a customer mindset that is far different from how it is in the US. 

Srikumar Krishnamurthy, Senior Vice-President & Co-Group Head, Corporate Ratings, ICRA, said, "The US Government has imposed a 25 percent tariff on passenger vehicles (sedans, sport utility vehicles, crossover utility vehicles, minivans and cargo vans) and light trucks (collectively referred to as automobiles), which come into effect from 3 April  2025. As the PV exports from India to the USA represent less than 1 percent of the total PV exports, the tariff imposition of the tariff does not have any material impact on the Automotive OEMs. The scenario is however different for auto components. On 12 March 2025, a 25 percent tariff was imposed on all aluminium and steel components being imported into the US. Subsequent to this, on 26 March 2025, a 25 percent tariff was imposed on other key auto parts as well (including engines, transmissions, powertrain components and key electrical parts except those under USMCA), with processes to expand tariffs on additional parts, if necessary. The effective date is pending but is expected to be no later than 3 May 2025. Auto components have not featured in the latest set of additional tariff announcements that has been made on 2 April 2025. India’s auto components exports accounted for around 29 percent of industry revenues in FY2024. Of this, about 27 percent went to the US. While the situation is evolving, the recent tariff related development and the consequent inflationary pressures and slowdown in demand in the US could have a negative impact on revenue and earnings for component exporters (in the affected product categories) over the next few months. Nevertheless, with higher tariffs being levied on other competing nations, this could also create long-term opportunities for the exporters. Exporters dependent on the US are also trying to diversify their revenue base across other geographies (including Asia). Measures to improve value addition, diversification into non-auto segments and cost-optimisation strategies are also being worked upon to reduce the potential impact on margins.

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ICRA has reported that India’s automobile sector is expected to experience a moderation in growth during FY2027. This follows a period of expansion in FY2026 driven by GST rationalisation and resilient economic activity. While policy changes improved affordability in the two-wheeler segment and enhanced fleet economics for commercial vehicles, growth rates are projected to normalise against a higher base.

The CV segment led the recent industrial upcycle, supported by infrastructure activity and GST rate cuts. Domestic wholesale volumes increased by 12.5 percent YoY during the first 11 months of FY2026, while retail volumes rose by 28.9 percent in February 2026.

Segment Forecasts:

• FY2026: Growth is expected to exceed previous estimates of 7-9 percent.
• FY2027: Growth is projected to moderate to 4-6 percent.
• Constraints: High funding costs and a consumer preference for pre-owned light commercial vehicles (LCVs) may limit near-term expansion.

The two-wheeler segment recorded a recovery in FY2026, with retail volumes growing by 11.5 percent in the 11M FY2026 period. This was supported by improved rural demand and financing availability following GST cuts for motorcycles and scooters below 350 cc. ICRA expects wholesale growth to slow from 9 percent in FY2026 to 3-5 percent in FY2027.

The auto component sector is forecast to grow by 7-9 percent in FY2027, driven by premiumisation and replacement demand. The industry plans a capital expenditure of INR 280 billion to INR 320 billion for the year, focusing on capacity expansion and electrification. While internal accruals will fund most investments, debt reliance may increase for battery cell localisation projects.

ICRA noted that while direct export exposure to West Asia is limited for component players, indirect risks exist. Approximately 25-30 percent of India's passenger vehicle exports are linked to West Asian markets, and disruptions there could affect component demand. Other monitorables include supply-chain volatility, energy costs and currency fluctuations.

‘The broad-based recovery seen in FY2026 has largely been policy-driven, particularly due to GST rationalisation, which improved affordability and demand sentiment across segments. Growth is expected to normalise in FY2027, given the higher base and emerging challenges from global uncertainties and input cost pressures. That said, continued investments in electrification, steady replacement demand and improving rural incomes are expected to support the sector over the medium term,’ the company noted.

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JSW MG Motor India has unveiled the sixth season of its flagship MG Developer Program & Grant (MGDP), created in partnership with the Department for Promotion of Industry and Internal Trade (DPIIT). With this initiative, the company continues its focus on nurturing India’s startup landscape by driving cutting-edge innovation. Under the overarching theme of automotive innovation, this latest edition seeks to cultivate forward-looking solutions that address the future of mobility.

Startups are invited to present groundbreaking ideas across a wide spectrum of fields, including artificial intelligence in automotive, vehicle-to-everything intelligence, sustainable and circular economy models, electric vehicle charging infrastructure, connected services, manufacturing, vehicle technology and logistics and supply chain. A jury composed of senior leaders and experts from industry, academia and corporate sectors will assess submissions based on originality and practical feasibility.

Participants selected for the programme will receive mentorship from the company and its network of ecosystem partners. They will also gain access to development resources, testing opportunities and potential grant support at the jury’s discretion. Submissions opened today and will close on 30 April 2026. Shortlisted teams will undergo mentoring sessions leading up to Demo Day on 1 June 2026.

Since its inception in 2019, the programme has been instrumental in fostering breakthrough mobility solutions. Across the first five seasons, it drew over 1,550 entries, with more than 290 teams shortlisted in the initial rounds. These teams benefited from mentorship provided by over 100 experts, including leadership from JSW MG Motor India and its technology partners, making it one of the largest mentoring initiatives in the automotive sector. To date, 51 startups have been shortlisted through the programme and are actively engaged in pilot projects.

Anurag Mehrotra, Managing Director, JSW MG Motor India, said, “Innovation remains the cornerstone of JSW MG Motor India’s vision for India, and we remain committed to nurturing this value through multiple initiatives. This new edition of MGDP aims to empower ambitious start-ups working across new energy, autonomous and connected mobility technologies. Together, we hope to shape a future where technology meaningfully enhances every customer’s experience.”

Sanjiv Singh, Joint Secretary, DPIIT, said, “Startup India, DPIIT is committed to supporting initiatives that foster collaboration, create opportunities for young talent and encourage India-specific innovation. We are delighted to partner with JSW MG Motor India for the new season of MGDP. This collaboration reflects our shared commitment to nurturing India’s future workforce and fostering a culture of practical problem-solving.”

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Maruti Suzuki India Limited marked a significant operational achievement with its Manesar in-plant railway siding, which crossed the 100,000-dispatch mark in under nine months. Being India’s largest facility of its kind and the company’s second PM GatiShakti terminal, this siding has played a key role in reducing environmental impact by avoiding an estimated 16,800 metric tonnes of CO2 equivalent emissions.

The siding facilitates the movement of popular models from the Gurugram and Manesar plants, including Alto, Brezza and Dzire, through a robust hub-and-spoke network. With over 500 rakes since it commenced operations in June 2025, the company now efficiently serves 380 cities from 17 hubs. This logistical strength builds on Maruti Suzuki’s legacy as the first automaker to secure an AFTO (Automobile-Freight-Train-Operator) license back in 2013, having moved more than 2.95 million vehicles by rail since fiscal 2014-15.

By advancing rail-based dispatch, the company actively contributes to UN Sustainable Development Goal 13. This initiative underscores its ongoing commitment to integrating sustainability into core industrial operations.

Hisashi Takeuchi, Managing Director & CEO, Maruti Suzuki India Limited, said, “In June 2025, Hon’ble Union Minister for Railways, Information and Broadcasting, Electronics & Information Technology, Shri Ashwini Vaishnaw and Hon’ble Chief Minister of Haryana, Shri Nayab Singh Saini inaugurated India’s largest automobile in-plant railway siding at our Manesar plant. I am happy to share that within a short span of nine months, we have dispatched 100,000 units, through this siding. This initiative reinforces our commitment to reduce carbon footprint in vehicle dispatches while easing overall road congestion. At full capacity, the Manesar siding has the capability to dispatch 450,000 units annually.

“In CY 2025, the company set a record by dispatching over 585,000 vehicles through railways. Interestingly, in the past decade, our share of rail mode in outbound logistics has grown exponentially, from 5 percent in 2016 to 26 percent in 2025. Going forward, we aim to scale up rail-based vehicle dispatches from the current 26 percent to 35 percent by FY 2030-31, in line with our commitment to build efficient and sustainable logistics and contribute to India’s net-zero ambition.”

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The Society of Indian Automobile Manufacturers (SIAM) has unveiled its ‘Smart Integrated Automotive Mobility Lab (SIAM Lab)’ at the Smart Mobility India Expo 2026. Held at Bharat Mandapam from 23–25 March 2026, the pavilion serves as a collaborative platform for original equipment manufacturers (OEMs), technology providers and research institutions.

The SIAM Lab, located in Hall-1, is organised into three functional areas designed to demonstrate the evolution of the Indian automotive sector:

• Sustainable Mobility: Focusing on decarbonisation and green transport.
• Research & Testing: Showcasing validation frameworks and safety standards.
• Technology: Highlighting software-defined vehicles and connectivity.

The exhibit features 14 electrified vehicles from manufacturers including Tata Motors, Kia India, JSW MG Motor India, Toyota Kirloskar Motor, BMW India and Hyundai Motor India. Two-wheeler and last-mile segments are represented by TVS Motor Company, Honda Motorcycle & Scooter India, Ather Energy, Hero MotoCorp, Montra Electric and EKA Mobility.

The initiative involves partnerships with technical and data entities such as ARAI, Qualcomm, HERE Technologies, Google, ITS India Forum and Onnyx. These collaborations aim to integrate hardware with digital infrastructure, reflecting the industry's shift towards smart mobility solutions. The exhibition aligns with national objectives for advanced and sustainable transportation.

Prashant K Banerjee, Executive Director, SIAM, said, “The SIAM Lab reflects the collective strength of India’s automotive ecosystem in advancing smart and sustainable mobility. Our participation at the Smart Mobility India Expo provides a platform to showcase innovation, foster collaboration, and highlight the industry’s readiness for future mobility solutions.”

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