Customs tax cut on US car parts: India's plan to counter Trump's tariffs

India is weighing cutting or scrapping customs duties on US automobile parts to counter the effect of President Donald Trump's automobile tariffs, which will come into force on April 2. Trump imposed a 25% tariff on all cars, which would have a major impact on India's auto sector. President Trump has been focusing on India with his sectoral tariffs and forthcoming reciprocal tariffs.

Eliminating customs duties on US car

These tariffs would harm India, particularly if a complete understanding is not achieved. India is seeking means to counteract the impact of these tariffs, such as lowering or eliminating customs duties on US car components imported, which are currently at 10-15%.

Possible impacts of Trump's tariffs

Trump's tariffs would decrease US economic production by 0.4% and result in 309,000 full-time equivalent job losses, according to the Tax Foundation. The tariffs would also boost federal tax collections by $1.5 trillion from 2025 to 2034.