Moreover, the 25% duty is still lower than the 70-100% tariffs that could result from reciprocal tariff measures. Trade analysts say India need not be concerned, given the relatively small volume of its car and bike exports to the US.Saurabh Agarwal, tax partner at EY India, says the limited implications for India’s auto industry mean the Indian government may not aggressively seek exemptions from the tariff.Ajay Srivastava, founder of the Global Trade Research Initiative, even discourages India from reducing its own import duties in response. He warns that lowering tariffs on passenger cars could be counterproductive, citing Australia’s experience—where import duties were slashed from 45% to 5% in the late 1980s, leading to the collapse of its domestic auto manufacturing industry. With the auto sector contributing one-third of India’s manufacturing GDP, policymakers will tread cautiously. Mrunmayee Jogalekar, an analyst at Asit C Mehta Investment Intermediates, said Tata Motors could face challenges as its subsidiary Jaguar Land Rover sells a significant number of cars in the US.What it means for IndiaNo big impact on Indian auto sector, but Tata Motors’ luxury car subsidiary JLR to be hit.India’s auto parts exports to US stand at around $2 bn, attracting just 2.5% duty. This will increase 10 times on April 3.
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