US President Donald Trump, on Wednesday evening, announced a 25% tariff on Indian exports to the US. In addition to this, he indicated a penalty, details of which are yet to be specified, for India’s continued purchase of oil and other goods from Russia.The development has raised concerns around Indian auto companies, particularly those with exposure to US markets.
According to a note from brokerage firm Nuvama Institutional Equities, conversations with component manufacturers reveal that commercial vehicle (CV) and other component tariffs have increased from 10% in the first quarter to 25%. Passenger vehicle (PV) component tariffs, however, were already at 25% during Q1.
Among the companies expected to be most impacted are Bharat Forge, which generates over 20% of its revenue from the US. Of this, 55-60% of which comes from CVs, 5-10% from PVs, and the rest from non-auto segments.Ramkrishna Forgings, with more than 30% of its revenue from North America, predominantly from the CV segment.
According to a note from brokerage firm Nuvama Institutional Equities, conversations with component manufacturers reveal that commercial vehicle (CV) and other component tariffs have increased from 10% in the first quarter to 25%. Passenger vehicle (PV) component tariffs, however, were already at 25% during Q1.
Among the companies expected to be most impacted are Bharat Forge, which generates over 20% of its revenue from the US. Of this, 55-60% of which comes from CVs, 5-10% from PVs, and the rest from non-auto segments.Ramkrishna Forgings, with more than 30% of its revenue from North America, predominantly from the CV segment.
Balkrishna Industries, which derives around 15% of its sales from the Americas, focused mainly on agriculture, construction equipment, and mining segments.
The negative impact is likely to come from both a potential decline in demand and the companies’ need to partially absorb the increased tariff burden.
