The auto component industry will face challenges. India’s auto components exports is 29% of industry revenues in FY24, with 27% of these exports going to the US.
Krishnamurthy, sr VP & co-group head of corporate ratings at ICRA, said while the situation is evolving, the recent tariff-related developments, coupled with inflationary pressures and a slowdown in US demand, could negatively impact revenue and earnings for component exporters over next few months. Experts say the new tariffs could provide India’s textile industry with a competitive edge over rivals like Vietnam, Bangladesh, and China, which face higher tariffs. “Currently, India holds 9% share in US textile and readymade garment imports, compared to China’s 25% and Vietnam’s 14%,” said Care Rating.