Bharat Forge To UPL — A Guide To Indian Stocks Under Trump's Tariff Thunder
While direct impact remains limited, secondary effects on demand and pricing may weigh on key sectors or create opportunities for Indian players.
Indian auto ancillary, metals, and chemical stocks are expected to see varied impacts from the new US tariffs announced by US President Donald Trump. While direct exposure for Indian companies remains limited, secondary effects on demand and pricing may weigh on key sectors, but also create opportunities for certain Indian players.
Sweeping 25% duties on imports from Canada and Mexico, a hike in tariffs against China, along with tariffs on steel and aluminium from all US trade partners, could disrupt global supply chains. Trade restrictions by the US could also open India to dumping.
On Tuesday, Trump confirmed that the US would move ahead with new tariffs on Canada and Mexico, marking a significant escalation in trade tensions. The 25% tariff on steel and aluminum imports from all US trade partners is set to take effect on March 12, while reciprocal tariffs on most countries will come into force from April 2.
The US president reiterated that there was "no room left" for negotiations with North American neighbours, signalling America’s firm stance on the matter. Canada has already announced retaliatory tariffs in response, further intensifying the trade conflict.
Trump also hiked the tariffs on China to 20% from 10% earlier, blaming lack of action on the latter's part to crack down on opioid supply into his nation. China retaliated with 15% tariff against US exports.
Auto Ancillaries: Supply Chain Risks Loom
Indian auto component manufacturers with significant exports to North America, especially Mexico, could feel the heat from potential disruptions in supply chains. US-based original equipment manufacturers such as Ford, General Motors, Volkswagen, BMW, and Mercedes-Benz rely on Mexico for vehicle production, and higher tariffs could impact their sourcing strategies.
Bharat Forge derives 25–30% of its revenue from the US, making it one of the more exposed Indian players.
Sona BLW Precision Forgings has 43% of its revenue coming from North America, with a small assembly plant in Mexico, posing potential risk.
Sundaram Fasteners and Timken India, with 20–25% and 15% US revenue exposure, respectively, could see indirect demand impacts if OEM production slows.
Balkrishna Industries generates 16% of its revenue from the Americas, leaving it vulnerable to shifts in trade dynamics.
SAMIL earns 4% of its revenue from Mexico, with most of these vehicles exported to the US. Limited exposure from its 11% China revenue mitigates risks.
JK Tyre Industries operates three plants in Mexico, raising concerns about increased costs and supply chain challenges.
Metals: Mixed Impact
The US imports 13–14% of its 90 million tonnes of steel consumption from key suppliers such as China, Canada, Brazil, and Mexico. Aluminium imports stand at 1.8 million tonnes, with nearly half coming from Canada. While India’s direct steel exports to the US are minimal ( around 1% of total exports), aluminium exports account for 5–6% of total production.
JSW Steel could benefit from tariffs, as its 1.5 million tonne Ohio subsidiary gains competitive protection. However, the US unit contributes only 4.5% to overall revenue.
Hindalco Industries, through its subsidiary Novelis, faces both positives and negatives. While aluminum tariffs could push up prices, its reliance on imported scrap from Canada could increase costs. The company, however, expects an exemption similar to past instances.
India could also see higher steel dumping from China, South Korea, and Vietnam as they redirect exports in response to US tariffs.
Chemicals: Players To Gain
Tariffs on Chinese chemical exports could open up opportunities for Indian manufacturers.
PI Industries stands to benefit, as Pyroxasulfone—one of the key molecules exported to the US—is a core product. Its economies of scale and process efficiencies provide a competitive advantage.
UPL, which exports Glufosinate, S-Metolachlor, Clethodim, and Metribuzin to the US, has faced pricing pressure due to Chinese competition. The tariffs may reduce this pressure, enhancing UPL’s competitiveness in the US.
Jubilant Ingrevia, the only non-Chinese pyridine manufacturer globally, could see higher demand across agrochemicals, pharmaceuticals, and semiconductors.
