US rate more biased against the Indian automotive, tire industry compared to Asian colleagues: ICRA

New Delhi: the 25 percent American rate on Indian export places the domestic car component industry and tire makers in an unfavorable position compared to Asian colleagues such as Japan, Vietnam and Indonesia, who are dealing with lower tasks, said Ratingbedrijf ICRA on Saturday.

The US government has announced that the rate on all goods from India will be from India from 7 August.

“The imposition of a rate of 25 percent by the US to Indian import has expressed concern in the Indian car companies and tire industry, both of which retain significant export exposure to the American market,” noted it.

With the US for 27 percent of the car components of India and 17 percent of tire exports, the tariff walk in Indian manufacturers at the disadvantage compared to Asian colleagues such as Japan, Vietnam and Indonesia, who are confronted with lower or preferential duties, ICRA said.

The increased rates could affect the competitiveness of Indian suppliers, especially in off-highway and replacement tire segments, and in various car components, it said.

While Indian tire exporters previously enjoyed a modest advantage over Chinese competitors, that lead can now be compensated by the lower tariff rates awarded to other Southeast Asian countries. Exportors of car components, in particular those highly dependent on the American market, is expected to diversify their geographies and improve the cost efficiency to reduce the impact, it said. The industry for car components reported a turnover of USD 80.2 billion (RS 6.73 Lakh Crore) for FY2025, a growth of around 10 percent compared to FY2024.

The export of automatic components grew by 8 percent to USD 22.9 billion (RS 1.92,346 crore) in FY25 of USD 21.2 billion (RS 1.75,960 crore) in FY24.