Manesar Auto Cluster Braces For Impact Of 50% US Tariff

(MENAFN- KNN India) New Delhi, Aug 28 (KNN) Manesar, one of India's key automobile hubs alongside Chennai and Pune, is preparing for challenges as the new 50 per cent US tariff regime comes into force.

However, unlike garment exporters, the auto ancillary sector has not been hit with a blanket tariff, offering some relief.

According to Jagdeep Rangar, head of Stork Rubber Product, exports to the US fall into two categories. Parts for passenger cars and light trucks will continue to attract a 27.5 per cent duty, while components for heavy trucks, cranes, agricultural equipment, and marine applications now face a steep 50 per cent tariff.

“The bigger blow will be in the latter segment, but since many companies manufacture for both, the impact will be widespread,” he said.

Rangar warned that meeting buyer demands for heavy discounts will be difficult without government support. Finding new markets is also not an immediate solution, as developing auto parts involves tooling, testing, and a lead time of nearly two years.

Vinnie Mehta, director-general of the Automotive Component Manufacturers Association of India (ACMA), said India exported auto components worth USD 6.6 billion to the US in 2024.

Of this, about USD 3.5 billion-covering cars and small trucks-will remain at a 27.5 per cent tariff, while the rest will fall under the new 50 per cent duty.

He noted that the US accounts for 8–9 per cent of India's USD 23 billion auto exports, within a total industry size of USD 80 billion. The EU is another large export destination worth USD 7 billion.

Industry players are exploring ways to cushion the blow. Nitin G R, founder of GrandPitstop, said re-routing shipments through third countries could reduce tariff pressure. Others are eyeing new markets in the Middle East, Africa, and Latin America.

ACMA president Shradha Suri Marwah stressed that the challenge also highlights the need for competitiveness, innovation, and value addition in India's auto component industry.

(KNN Bureau)

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