ACMA said it understands the US' concerns over the widening trade deficit, and hopes the matter can be resolved going forward
PUNE: The Automotive Component Manufacturers Association of India or ACM on Thursday said it remains hopeful that the ongoing bilateral negotiations between the Indian and US governments will lead to a balanced resolution that benefits both economies.
Shradha Suri Marwah, ACMA President and CMD of Subros said that auto parts, steel, and aluminum, already subject to existing tariffs, are not included in this new round of tariffs announced as part of the 'Liberation Day' initiative on Wednesday.
On Wednesday, the US slapped a 27 per cent tariff on imports from India. Trump said that the tariffs charged by India to the US are 52 per cent.
"Autos & auto parts and steel & aluminum articles, already subject to Section 232 tariffs at 25%, announced earlier in President Trump’s order on March 26, 2025, are not covered in the aforementioned order. The detailed list of auto components that will be subject to 25% import tariff in the US is however awaited," Marwah said in a statement.
The move is part of Donald Trump's attempt to rebalance trade and cut the US' trade deficit with the rest of the world.
The US had a merchandise trade deficit of a whopping $1.2 trillion with the rest of the world in 2024, up from $1.06 trillion, leading to the accumulation of dollars outside the country and posing a long-term threat for the US. The gap has been widening, and for January this year the country had a goods deficit of $156.8 billion, leading to alarm bells ringing in the administration.
ACMA said it understands the US' concerns over the widening trade deficit, and hopes the matter can be resolved going forward.
"We understand the intent of the US administration to boost domestic manufacturing and address trade imbalances. 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," ACMA said.
The potential impact on India's auto component industry could be significant. According to ACMA data, the industry recorded a combined turnover of USD 74.1 billion in FY2024, with exports totaling USD 21.2 billion.
The United States represents a major market, with India exporting USD 6.79 billion worth of auto components to the U.S. while importing only USD 1.4 billion, creating a substantial trade surplus in India's favor.
ACMA represents over 1,000 manufacturers who contribute more than 90 per cent of the auto component industry's turnover in India's organized sector.
