Donald Trump to impose tariff on semiconductors 'very shortly': How will it affect Indian auto sector?

US chairperson Donald ruff said on th that he would impose tariffs on semiconducting material imports “ really shortly”.According to Trump, the order would spare goods from companies such as Apple that have pledged to boost their production in the US.“Tim Cook would be in pretty good shape,” Trump said, noting his recent investment commitments, while addressing the media at the White House dinner with several tech CEOs.Trump said that the tariff wouldn't be high but “fairly substantial”.“I've discussed it with the people here, chips and semiconductors, and we’ll impose tariffs on companies that aren’t in. We’ll impose a tariff very shortly. You probably are hearing we’ll impose a fairly substantial tariff, or not that high, but fairly substantial tariff,” he added.The Republican leader clarified that if a company were planning to come into the US to build, the tariffs would not affect it.How will Donald Trump's tariff on semiconductor imports affect Indian automakers?Any duties on semiconductors in the United States could also impact the auto sector in India.India is already in a disadvantageous position, as Donald Trump's tariffs on the country stand at 50 percent, half of which are due to New Delhi's purchases of Russian oil.Analysts believe that Donald Trump's tariffs on semiconductor imports threaten to disrupt the global supply chain, creating ripple effects across industries heavily reliant on chips."The Indian automotive sector, including passenger vehicles, commercial fleets, and electric vehicles, is particularly exposed due to its full dependence on imported semiconductors," Senior Market Analyst Justin Khoo was quoted by the Mint as saying.According to other analysts, auto OEM exporters to the US may come under pressure as the US's proposed semiconductor tariffs are bound to trigger a rise in input costs or disrupt global supply chains.Data from the Society of Indian Automobile Manufacturers (SIAM) showed that exports in the sector from India rose by 19 percent to over 5.3 million units in the 2024-25 fiscal year. The rise is attributed to robust demand for passenger vehicles, two-wheelers, and commercial vehicles in the overseas markets, industry body Siam stated.It was the auto sector's best-ever yearly performance.Chip scarcity has already plagued the Indian auto sector. In the financial year 2024 alone, manufacturers in the country lost roughly 300,000 units due to chip scarcity.According to experts, scarcity and rising input costs could hit the segment harder. EV makers are especially vulnerable as semiconductor chips are extensively used in electric vehicles.Indian auto component manufacturers, such as Bharat Forge, have already expressed caution regarding their US export business for the current fiscal year, citing challenging market conditions influenced by Trump's tariffs and ongoing regulatory uncertainties.Experts believe that companies like Sona BLW, Bharat Forge, and Samvardhana Motherson are likely to remain under pressure, given their significant export exposure and dependency on global chip supplies. Automakers with US exposure, such as Tata Motors, could also be impacted indirectly through rising costs and logistical challenges across the supply chain.