Trump Imposes 25% Tariff on Indian Auto Exports; Tata Motors, Bajaj Auto & More Slip

On April 2, 2025, U.S. President Donald Trump confirmed a 25% tariff on fully assembled cars imported from India, effective April 3. Additionally, by May 3, a similar tariff on auto parts was expected to be implemented. 

These tariffs, part of Trump’s broader “Fair and Reciprocal Plan”, were announced at the “Make America Wealthy Again” event. The move is aimed at aligning U.S. tariffs with those imposed by other countries on American goods. This development has raised concerns for India’s automobile sector, particularly its auto components industry, which has a significant export market in the U.S.

India’s Auto Exports: Impact and Exposure

While India’s passenger car exports to the U.S. are relatively small, just $8.9 million in 2024, or 0.13% of India’s total car exports worth $6.98 billion, the auto parts sector is more vulnerable. India exported $2.2 billion worth of auto components to the U.S. in 2024, accounting for 29.1% of its global auto parts exports. The new tariffs are expected to increase costs for Indian manufacturers, potentially reducing demand for Indian auto parts in the U.S. market.

Impact on Tata Motors and Jaguar Land Rover

Tata Motors’ subsidiary, Jaguar Land Rover (JLR), relies heavily on the U.S. market, which accounted for 33% of its total volumes in the first nine months of FY25 and 23% of its revenue in FY24. The tariff imposition could lead to higher prices for JLR vehicles in the U.S. 

Impact on Indian Auto Stocks

On April 3, 2025, Nifty Auto opened at 21,140.20, down from its previous close at 21,408.85. As of 10:44 AM, it was at 21,300.35, down by 0.51%. Looking at the stocks in the Nifty Auto, Mahindra & Mahindra, Exide Industries, and Maruti Suzuki India were up by 0.53%, 0.51% and 0.42%, respectively.  

However, most of the auto stocks were in the red. Balkrishna Industries dropped the most by 2.42%, Bharat Forge fell by 2.58%, Bajaj Auto saw a drop of 2.32%, Samvardhana Motherson International slipped by 1.51%, TVS Motor Company declined by 1.32%, and Tata Motors fell by 1.58%. 

Conclusion 

The U.S. tariffs on Indian auto exports have raised concerns, particularly for the $2.2 billion auto parts sector, which accounts for 29.1% of India’s global exports. The impact was reflected in the stock market, with Bharat Forge down 2.58%, Bajaj Auto dropping 2.32%, and Tata Motors falling 1.58%.

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