India-US Trade Deal: Indian Auto Industry Welcomes Tariff Cuts, Eyes Global Growth

U.S. President Donald Trump and Indian Prime Minister Narendra Modi have announced a trade deal between the two nations. The agreement reduces U.S. tariffs on Indian goods from 50 percent to 18 percent, in exchange for India ceasing its purchases of Russian oil and implementing lower trade barriers. This deal benefits various sectors by enhancing access to the U.S. market, including India's automobile sector.

Welcoming the agreement, India's automobile industry has reacted positively to the India-U.S. trade deal, anticipating an increase in exports, long-term investment, and improved supply chain integration. Industry leaders have stated that the deal brings greater predictability to bilateral relations, particularly for sectors like automobiles and auto components. Here's what the leaders had to say.

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Mahindra Group

Statement from Dr. Anish Shah, Group CEO & Managing Director, Mahindra Group: "The Mahindra Group welcomes the India-US trade deal, which marks a significant step forward in strengthening bilateral trade and investment ties. The immediate reduction in reciprocal tariffs on Indian exports from 50% to 18%, along with the commitment to progressively lower tariff and non-tariff barriers, will boost growth momentum and improve the predictability businesses need to invest with confidence.

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With the Indian economy on a strong growth trajectory, this deal adds meaningful momentum to India's growth ambitions."

TVS Motor Company

Statement from Sudarshan Venu, Chairman, TVS Motor Company: "TVS Motor Company welcomes the India - US trade deal announced following the conversation between PM Modi and President Trump. The reduction in the US reciprocal tariff on Indian goods to 18% is a positive step that improves export competitiveness and reinforces confidence in long-term bilateral economic ties, furthering the Hon'ble PM's vision of Viksit Bharat 2047. Equally important is the intent on both sides to progressively lower tariffs and non-tariff barriers, which can deepen supply-chain integration, enable faster technology collaboration, and attract investment into advanced manufacturing.

India has now secured several strategic trade deals with key economic partners around the world. In a challenging global environment, predictability and openness in trade help the Indian industry scale, innovate, and create jobs. We look forward to a stronger India-US partnership that accelerates growth, expands market access, and supports India's ambition to be a globally competitive manufacturing and innovation hub."

Why the US is Important For India's Auto Sector

India's automotive sector views the United States as a crucial market for exporting components and a key partner in technological advancements, particularly in electric mobility, advanced electronics, and sustainable manufacturing. Industry leaders believe that clearer information on tariffs and policies could encourage Indian companies to boost exports and better integrate into global value networks.

The trade agreement between India and the US, announced yesterday evening, aims to reduce trade tensions and improve market access by significantly lowering reciprocal tariffs on Indian exports. This agreement also establishes a framework for gradually eliminating tariff and non-tariff barriers that have consistently challenged exporters in various sectors, including automobiles, auto parts, and engineering products.