India is open to the possibility of reducing or even eliminating customs duties on auto parts imports from the US, a government official said.
Currently, the customs duty on parts imports ranges between 10% and 15%, averaging at 11%. "There is consensus that the domestic industry will not be impacted by imported US auto components," the official said.
New Delhi is weighing steps to reach an understanding with Washington on the Trump administration's 25% auto tariff plan.
The official said the general belief is that high-cost US-made parts would not be able to match prices offered by Indian parts makers even if customs duties are scrapped.
Impact Analysis
Recent talks between the US and Indian trade officials on a proposed Bilateral Trade Agreement focused on components and not automobiles, the official pointed out.
India has been actively considering duty cuts on select products it exports to the US but does not import in significant quantities from there, ET has reported earlier.
India exports about $7 billion worth of auto parts to the US annually, accounting for about a third of its total parts exports. Parts imports from the US are about $1.5 billion a year, officials said.
The Modi government is assessing the impact of US President Donald Trump's declaration to levy a 25% tariff on imports of cars and parts.
Officials from India and the US met in New Delhi last week.
Both sides have broadly reached an understanding on the next steps towards finalising a mutually beneficial, multisector BTA, with the goal of finalising the first tranche by fall of 2025, according to an official statement. Sectoral expert level engagements under the BTA will start virtually in the coming weeks, the statement said.
According to the Automotive Component Manufacturers Association of India (ACMA), the component industry grew by 9.8% to $74.1 billion in FY24. Domestic component supply stood at $62.4 billion, with the electric vehicle (EV) sector contributing 6% to total production.
Currently, the customs duty on parts imports ranges between 10% and 15%, averaging at 11%. "There is consensus that the domestic industry will not be impacted by imported US auto components," the official said.
New Delhi is weighing steps to reach an understanding with Washington on the Trump administration's 25% auto tariff plan.
The official said the general belief is that high-cost US-made parts would not be able to match prices offered by Indian parts makers even if customs duties are scrapped.
Impact Analysis
Recent talks between the US and Indian trade officials on a proposed Bilateral Trade Agreement focused on components and not automobiles, the official pointed out.
India has been actively considering duty cuts on select products it exports to the US but does not import in significant quantities from there, ET has reported earlier.
India exports about $7 billion worth of auto parts to the US annually, accounting for about a third of its total parts exports. Parts imports from the US are about $1.5 billion a year, officials said.
The Modi government is assessing the impact of US President Donald Trump's declaration to levy a 25% tariff on imports of cars and parts.
Officials from India and the US met in New Delhi last week.
Both sides have broadly reached an understanding on the next steps towards finalising a mutually beneficial, multisector BTA, with the goal of finalising the first tranche by fall of 2025, according to an official statement. Sectoral expert level engagements under the BTA will start virtually in the coming weeks, the statement said.
According to the Automotive Component Manufacturers Association of India (ACMA), the component industry grew by 9.8% to $74.1 billion in FY24. Domestic component supply stood at $62.4 billion, with the electric vehicle (EV) sector contributing 6% to total production.
