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Informist, Monday, Jan. 20, 2025

 

By Krity Ambey

 

NEW DELHI – The Automotive Component Manufacturers Association of India wants the government to pursue a trade agreement with the US, its largest export market. This is against the backdrop of Commerce Minister Piyush Goyal's ambitious target of $100 billion in exports for the domestic auto component sector by 2030.

 

"That's a very aspirational target. The commerce minister is known to challenge the industry all the time, and we accept the challenge," ACMA Director General Vinnie Mehta said in an interaction with Informist on the sidelines of Bharat Mobility Global Expo 2025. "Our initial thoughts are that we should focus on the US as an export market." India's auto component exports were $21.2 billion in 2023-24 (Apr-Mar), including about $6 billion to the US.

 

In response to concerns over US President-elect Donald Trump's threat to impose high tariffs on India, Mehta said, "we are advocating a trade agreement with the US." Trump is set to take oath as US president on Monday. 

 

Trump has threatened to impose high tariffs on all countries that have a trade surplus with the US, including India, which had a trade surplus of $35.32 billion with the US in FY24. Last month, Trump emphasised his plan to implement reciprocal tariffs in response to "high tariffs" that India imposes on specific American goods. 

 

According to Mehta, the Indian government should try to explore a trade deal with the US to protect its market. "Today, the US accounts for about $300 billion worth of component imports and our share is only 2%," Mehta said. "So even if we were to aspire to have about 5% of the US' share, that could give us quite a bit of a push." 

 

Mehta said a trade pact with the US is the only policy intervention that the sector wants from the government. "We have not even sent any demands for the Budget, all the policies of the government have been very, very benign (for the sector)," he said. 

 

At the inauguration of the Bharat Mobility Global Expo 2025, Minister Goyal had told the auto component manufacturers' association to formulate a five-year roadmap to meet the target of $100 billion exports by 2030. He had also asked the sector to explore newer export destinations and mentioned some potential regions such as Central Europe, Latin America, southeast Asia, and Africa. 

 

In accordance with Goyal's suggestion, another arrow in the auto component sector's quiver to hit the exports target is its aftermarket segment in developing countries. "We have a very important segment of the market, which is the aftermarket--the service and repair part of the market in the developing world, especially the African countries," Mehta said. The sector sees an export opportunity of $15 billion-$20 billion there in the next five years, Mehta added. India's auto component exports to Africa were close to $1 billion in FY24.  End

 

US$1 = INR 86.48

 

Edited by Namrata Rao

 

 

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