- Indian auto component industry set for growth via US-India trade deal with new supply projects
- Ford, GM, and Stellantis are potential US Tier 1 partners for Indian auto component firms
- Production and exports from new projects likely to begin from 2027 onwards
The Indian automotive component industry is bracing itself for good times ahead as it is poised to sign a wave of new supply projects with Tier 1 auto manufacturers, in what will be a direct impact of the recently-brokered US-India trade deal. Industry sources have told NDTV Profit that Ford, GM and Stellantis are among the American tier 1 players who could sign deals with Indian companies.
However, before any concrete development, the Indian auto component manufacturers, as well as the US automakers, are currently awaiting clarity on the specific Harmonised System of Nomenclature (HSN). These new projects, once signed, are expected to commence production and shipping from 2027 onwards.
This comes on the back of a recently-announced interim framework that proposes zero-duty access for certain automotive components and a reduction in reciprocal tariffs from previous highs of 50% down to 18%.
This development was crucial for Indian auto ancillary players as the US is a critical market for the domestic industry. Latest figures from the Automotive Component Manufacturers Association of India (ACMA) suggest auto components exports to the US reached $6.2 billion in the 2024/25 fiscal, which accounts for about 28% of India's total component exports.
Industry leaders have told NDTV Profit that a key monitorable is the fine print of the bilateral trade agreement between India and US, including the HSN code details. The fine print of the deal is expected to come out by mid-March. Any clarity will allow suppliers to factor in new duties and identify the magnitude of the relief on existing levies.
The deal is seen as a strategic pivot to deepen India's integration into the global supply chains of Detroit's "Big Three," particularly as global manufacturers seek "China-plus-one" sourcing alternatives.
ALSO READ: Hunter Surge, Classic Strength: How Royal Enfield Has Beaten Hero-Harley And Bajaj Triumph
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
