India Drug, Auto Exporters See Limited Impact of US Tariffs-OxBig News Network

(Bloomberg) — Indian exporters don’t anticipate a major hit from US President Donald Trump’s latest threat to impose higher tariffs on automobile and pharmaceutical imports.

Executives and industry body heads from the two sectors said that any sweeping hike from the US would not impact the ability of Indian companies to compete in the export market, as other rivals in Asia would also be equally effected. 

Generic drugs from the South Asian nation are unlikely to be negatively impacted by higher levies and “any hike in tariffs would affect competitors similarly,” said Raja Bhanu, director general of the Pharmaceuticals Export Promotion Council of India, which is under India’s commerce ministry. India is a hub for generic drug manufacturing, and its products make over 40% of generic prescriptions in the US, Bhanu said. 

On Tuesday, Trump said he would likely impose 25% tariffs on auto, semiconductor and drug imports and an announcement may come as soon as April 2. While the move would represent a dramatic widening of the President’s trade war, Indian industry leaders said they can bring about policies to limit the damage. 

Bhanu, for example, said that India should remove existing tariffs on US formulation imports, and that could reduce the risk of any retaliatory levies on the industry from the White House. The South Asian nation exported drugs and pharmaceuticals worth $8.7 billion to the US in 2023-24, according to India’s commerce ministry. The two countries are also aiming to finalize a trade deal this year, which could shield India from the brunt of Trump’s hikes. 

Auto component manufacturer Sona BLW Precision Forgings Ltd., which relies on the US for about 40% of its revenue, also expects minimal impact to its business even if Trump presses ahead with his plans for reciprocal tariffs, the company’s top executive said. Nearly all auto components imported by India are subject to a basic import duty of only 7.5% in India, the company’s Chief Executive Officer Vivek Vikram Singh said in an interview earlier this week. 

The South Asian nation exported auto parts worth $6.69 billion to the US in 2023-24 and imported parts worth $1.6 billion from America, according to data from the Automotive Component Manufacturers Association of India.

Assuming the worst case scenario of the US still imposing similar tariffs on Indian auto components, Singh said he anticipates the resultant impact to be minimal.

–With assistance from Satviki Sanjay.

(Updates with bilateral trade figures for auto parts in seventh paragraph)

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