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India-US Trade Deal to Boost Auto Parts Exports, Enhance Competitiveness

The Automotive Component Manufacturers Association of India (ACMA) has welcomed the framework for an interim trade agreement between India and the United States. The deal includes commitments to preferential tariff rate quotas for automotive parts and the removal of certain US tariffs, which ACMA states will boost export competitiveness. Trade data shows consistent growth in auto component exchanges between the two nations over the past five years. ACMA looks forward to further engagement to ensure automotive components are fully integrated into the final bilateral agreement.

Key Points: India-US Trade Deal to Boost Auto Component Exports

  • Framework for interim trade agreement reached
  • Preferential tariffs for auto parts
  • Removal of Section 232 tariffs on inputs
  • Rising bilateral auto component trade
2 min read

US trade deal to enhance export competitiveness for auto component manufacturers: ACMA

India-US interim trade agreement to enhance auto component export competitiveness, remove tariffs, and strengthen supply chains, says ACMA.

"These measures will lead to enhanced export competitiveness, deepen technology collaboration, and reinforce India's role as a trusted partner... - Vikrampati Singhania"

New Delhi, February 7

The Automotive Component Manufacturers Association of India welcomes the announcement of the Interim Trade Agreement framework between India and the United States, reflecting a shared commitment to strengthen bilateral trade, manufacturing cooperation, and resilient supply chains between the two economies.

The US and India announced in a joint statement that they have reached a framework for an Interim Agreement on reciprocal, mutually beneficial trade (the Interim Agreement) and have agreed on its terms.

Commenting on the announcement, Vikrampati Singhania, President, ACMA and Vice Chairman & MD, JK Fenner (India), said, "ACMA welcomes the India-U.S. Interim Trade Agreement framework and the parallel announcements by the US Administration, which signal a clear intent to strengthen bilateral manufacturing and supply-chain partnerships. For the Indian auto component industry, the commitment to preferential tariff rate quotas for automotive parts, removal of Section 232 tariffs on select inputs, and a pathway for further tariff rationalisation under the proposed Bilateral Trade Agreement are indeed positive steps."

"These measures will lead to enhanced export competitiveness, deepen technology collaboration, and reinforce India's role as a trusted partner in resilient global automotive supply chains. ACMA looks forward to constructive engagement with both governments to ensure that automotive components are fully integrated into the final agreement, with balanced market access and long-term policy certainty," he added.

As per the data shared by the ACMA, trade in auto components between India and the United States has continued to expand over the past five financial years, reflecting strengthening industrial ties between the two countries.

India's exports of auto components to the US rose from USD 3,561 million in FY2020-21 to USD 5,280 million in FY2021-22, before increasing further to USD 5,648 million in FY2022-23.

Exports maintained their upward momentum in FY2023-24 at USD 5,823 million and reached USD 6,225 million in FY2024-25. In the first half of FY2025-26, India exported auto components worth USD 3,124 million to the US.

On the other hand, US exports of auto components to India also registered consistent growth. Shipments increased from USD 904 million in FY2020-21 to USD 1,218 million in FY2021-22, followed by USD 1,482 million in FY2022-23.

Exports remained broadly stable at USD 1,483 million in FY2023-24 and rose slightly to USD 1,505 million in FY2024-25. During the first half of FY2025-26, US exports to India stood at USD 844 million.

- ANI

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Reader Comments

S
Sarah B
As someone working in the manufacturing sector in Chennai, this is a welcome step. The removal of Section 232 tariffs on select inputs will directly reduce our production costs. Hoping the final agreement ensures a level playing field and doesn't just benefit large corporations but also MSMEs in the auto component ecosystem.
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Vikram M
Good move strategically. Deepening ties with the US makes sense for supply chain resilience, especially with the China factor. The numbers are impressive – exports nearly doubled in 5 years! Hope our manufacturers use this opportunity to move up the value chain into more advanced components, not just remain a low-cost supplier.
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Rohit P
While the deal sounds positive, I hope the government is also focusing on the domestic market. Cheaper imports from the US could hurt some of our smaller local players. The agreement must be truly reciprocal. "Balanced market access" is the key phrase here. Let's not celebrate too early.
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Priya S
This is excellent! More exports mean more opportunities for engineers and technicians. My brother works at an auto parts factory in Pune, and they've been talking about expanding. Such partnerships also bring in better technology and quality standards. Win-win for both countries. 🙌
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Michael C
The data tells a compelling story of a growing trade relationship. The US exports to India have also grown steadily, which is good for American jobs. A resilient and diversified supply chain is in everyone's interest. Looking forward to seeing the final details of the Bilateral Trade Agreement.

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