Donald Trump threat rattles Indian exporters of automobile parts

The US accounts for 22% of all export in the category

Indian exporters of automobile parts are bracing for bad news from America, where President Donald Trump is threatening to raise import duties significantly on their products. 

Last Friday, he had directed his commerce department to probe a burgeoning in the import of automobiles and components. The inquiry is to establish if these are threatening the domestic industry’s health and ability to research and develop new technologies, the US Department of Commerce said on Wednesday.

The Automotive Component Manufacturers Association of India (ACMA) says export of Indian auto parts are projected at $2.7 billion (Rs 183 billion) in 2017-18. It was $2.3 billion in 2016-17. The US accounts for 22 per cent of all export in the category. “The US is the single biggest market for India's automobile component export. However, any move such as this will be more directed towards China, which exports more than $170 billion of auto components (yearly) to the US,” says Vinnie Mehta, director-general of ACMA. 

Apart from China, the US has strong trade ties with Japan, South Korea and Germany in the segment. US-based auto and auto part makers manufacture in Mexico and Canada and send to America. The move has been expected for some time, with Trump having made the US automobile industry’s decline the centrepiece of his rhetoric that the US had lost its earlier manufacturing prowess. “We are still studying the order. Our exports might be affected,” said a functionary at Motherson Sumi Systems.