Tariff Turbulence: US Auto Component Industry Faces Challenges Amid Growth

The US tariffs impact on the domestic auto component industry is expected to intensify in the second half of the fiscal year. Although the Indian auto component industry grew by 6.8% during April-September FY26, uncertainties around new contracts loom as US tariffs strain thin margins.

The domestic auto component industry in the US is bracing for significant pressure in the latter half of the fiscal year, attributed largely to imposed tariffs. This industry, represented by the Automotive Component Manufacturers Association (ACMA), foresees increasing challenges as it navigates the uncertainties brought about by these tariffs.

The Indian auto component sector reported a growth of 6.8% for the first half of FY26. Despite a positive export growth of 9.3% and stable shipments to the US, the industry faces new contract uncertainties and a trade deficit increase, with imports rising at a faster pace than exports.

Factors like geopolitical instability, GST rates, and material shortages pose additional headwinds. The ACMA underscores the need for adaptation through deeper localization, capacity expansions, and strategic stakeholder collaborations to prepare for the future powered by emerging mobility technologies.

(With inputs from agencies.)