Whalesbook
Trade Pact Signals Export Surge
The Automotive Component Manufacturers Association of India (ACMA) has lauded the framework for an Interim Trade Agreement established between India and the United States. This accord signals a significant commitment to bolstering bilateral trade, manufacturing cooperation, and the resilience of supply chains between the two nations. The agreement, announced via a joint statement, sets the stage for mutually beneficial trade enhancements.
Key Benefits for Manufacturers
Vikrampati Singhania, President of ACMA, highlighted specific advantages for the Indian auto component industry. The framework includes preferential tariff rate quotas for automotive parts, the removal of Section 232 tariffs on select inputs, and a clear path toward further tariff rationalization. These measures are anticipated to significantly improve export competitiveness and deepen technological collaboration, solidifying India's position as a reliable partner in global automotive supply chains.
Robust Export Growth
Data from ACMA indicates a consistent upward trend in trade between India and the US over the past five fiscal years. India's auto component exports to the US grew from $3,561 million in FY2020-21 to $6,225 million in FY2024-25, demonstrating robust industrial ties. The first half of FY2025-26 already recorded $3,124 million in exports, maintaining this momentum. Concurrently, US exports of auto components to India have also seen steady growth, increasing from $904 million in FY2020-21 to $1,505 million in FY2024-25.
Future Outlook
ACMA is now focused on ensuring automotive components are fully integrated into the final agreement, advocating for balanced market access and long-term policy certainty. The association anticipates constructive engagement with both governments to leverage the full potential of this trade framework.