India-US Interim Trade Agreement to Strengthen Auto Component Exports
The Automotive Component Manufacturers Association of India (ACMA) has expressed strong support for the newly announced framework of an Interim Trade Agreement between India and the United States. This development underscores a mutual commitment to bolster bilateral trade, enhance manufacturing cooperation, and build resilient supply chains between the two major economies.
Key Benefits for Auto Component Industry
Vikrampati Singhania, President of ACMA and Vice Chairman & MD of JK Fenner (India), highlighted the positive implications of the agreement. He stated, "ACMA welcomes the India-U.S. Interim Trade Agreement framework and the parallel announcements by the US Administration, which signal a clear intent to strengthen bilateral manufacturing and supply-chain partnerships." Key measures include:
- Preferential tariff rate quotas for automotive parts.
- Removal of Section 232 tariffs on select inputs.
- A pathway for further tariff rationalisation under the proposed Bilateral Trade Agreement.
These steps are expected to enhance export competitiveness, deepen technology collaboration, and reinforce India's role as a trusted partner in global automotive supply chains. Singhania added, "ACMA looks forward to constructive engagement with both governments to ensure that automotive components are fully integrated into the final agreement, with balanced market access and long-term policy certainty."
Steady Growth in Bilateral Trade
According to data shared by ACMA, trade in auto components between India and the United States has shown consistent growth over the past five financial years, reflecting strengthening industrial ties.
India's Exports to the US:
- FY2020-21: USD 3,561 million
- FY2021-22: USD 5,280 million
- FY2022-23: USD 5,648 million
- FY2023-24: USD 5,823 million
- FY2024-25: USD 6,225 million
- First half of FY2025-26: USD 3,124 million
US Exports to India:
- FY2020-21: USD 904 million
- FY2021-22: USD 1,218 million
- FY2022-23: USD 1,482 million
- FY2023-24: USD 1,483 million
- FY2024-25: USD 1,505 million
- First half of FY2025-26: USD 844 million
This upward trend highlights the expanding trade relationship and the potential for further growth under the new agreement framework.
Future Outlook and Implications
The Interim Trade Agreement is poised to create a more favourable environment for Indian auto component manufacturers, reducing trade barriers and fostering innovation. By integrating automotive components into the final pact, both countries aim to achieve sustainable economic benefits and reinforce their strategic partnership in the global automotive sector.
