Minda Corp Sees US Tariff Impact as Short-Term, Plans Global Supply Chain Shift

In an interview with ANI on the sidelines of the World Economic Forum meeting in Davos, Aakash Minda said the US tariff on India is having a short-term impact, and things would ease out in the long term.

"It is impacting in the short term. But I think things are going to ease out in the long term and the supply chain is going to continue. So, the overall supply chain in the automotive industry is changing across the world. So, we want to be a very important part of this game. We are going to figure out our way on how we can export from different parts of the country as well as from other Asian countries as well to the US," he said.

He was answering a query on the US tariff and its impact on his company. Minda Corporation Ltd is a leading auto manufacturer in India.

The United States has imposed 50 per cent tariff on Indian goods and the two countries engaged in negotiations for a Bilateral Trade Agreement.

Answering a query on the competition in the international market that Minda Corporation is facing due to US tariffs, Aakash Minda said it is primarily from China.

"Primarily China. If you look at Europe, there the Chinese component manufacturers are stepping in much faster. But when it comes to the US, that is where they are more available to buy products from India, Vietnam, Indonesia and other such countries. So, that is where the exports' focus is towards the US," he said.

Asked about the United States getting auto components from Mexico, Aakash Minda said "all the things are now working as nearshoring and dual shoring" and the Indian companies are looking at the opportunities.

"Mexico is the next door (to the US). So, all the things are now working as nearshoring and dual shoring. So, when it comes to nearshoring, Mexico becomes a very important part of the US manufacturing ecosystem. We, as Indian companies, are also looking at how we can export to the US and then move to the nearshoring to Mexico in the long run to cater to the US markets," he said.

He said Minda Corporation Ltd is supplying auto components to almost all automotive manufacturers in the country and its focus is to triple exports from India in the next five years from plant locations in India, Indonesia and Vietnam.

Aakash Minda said the company is investing to make its supply chain more resilient and is building long-term partnerships.

"We are supplying to almost all the automotive manufacturers in India, whether it is Maruti, Tata, Mahindra, Bajaj, TVS, HMSI. We are also exporting about 10%. So, our focus for the next five years is how we can triple our exports from India as well as from our plant locations in Indonesia and Vietnam," he said.

He said investment is being made for localisaiton of a lot of electronic parts.

"What we are now investing is making our supply chain resilient on localisation, on account of digitisation as well as creating long-term partnerships all across, where we can make in India for the world and also whether electric vehicle mobility is coming in, making components for that as well as the electronics. So, localisation on a lot of electronic parts as well, that's where we are investing in now," he said.

Aakash Minda said that he has also signed a MoU with the Maharashtra government and met the Finance Minister of Uttar Pradesh for investing in the state.

"I think Davos is a place where you meet global leaders, policymakers and how we are looking at India to grow in terms of making key supply chain and the key manufacturing partner globally. This is the regard in which I have come here. I have also met and signed an MoU with the Maharashtra CM; we are investing close to about Rs 1200 crores starting from this year onwards for the next 5-6 years for scaling up the manufacturing industry," he said.

"We have just met the Finance Minister of UP for investing in UP which is our headquarters on how we can scale and build a resilient supply chain in India for the automotive componenets industry," he added

India's automotive industry is a cornerstone of the nation's manufacturing and economic growth, contributing 7.1% to India's Gross Domestic Product (GDP) and 49% to manufacturing GDP, as per a NITI Aayog report.

- ANI