US tariffs on China open new doors for India's EVs sector

The new tariffs imposed by the United States on Chinese electric vehicles (EVs) and key parts are creating fresh opportunities for India's EV industry. The U.S. has raised tariffs on Chinese EVs to 100–125% and increased duties on important components like lithium-ion batteries to 50%. Experts say this shift could help India grow its EV sector faster. "About 60-70% of EV parts used in India currently come from China," stated Vipin Singhal, Associate Director at Anand Rathi Investment. "China produces around 75% of the world's lithium-ion batteries, so India depends heavily on Chinese supplies," he added.
With U.S. tariffs in place, suppliers who earlier focused on America might now turn to India. "This could bring better prices and reliable supplies for Indian companies," said Jayant Gupta, co-founder at Alt Mobility. Since India mostly imports raw materials, the risk of poor quality is also lower, he added. However, there are also some concerns. Experts warn that cheaper Chinese EV products could flood the Indian market, hurting local manufacturers like Tata Motors and Mahindra. "This could affect profits and the future growth of India's EV industry," noted Rahul Shresth, Vice President at Avener Capital.
There is also a big opportunity for Indian companies to export more EVs. With the U.S. making it harder for Chinese companies, Indian EV makers could find it easier to enter markets like the United States. But experts caution that India must first build stronger infrastructure, better supply chains, and invest more in research, technology, and global partnerships. Government support will be very important. Schemes like the Production-Linked Incentive (PLI) program have helped investments so far. But if these schemes are rolled back too early, it could slow down growth and hurt investor confidence, indicate experts.
India's EV market has already grown a lot — from 1.5 lakh units sold in FY2020 to over 41 lakh units by FY2024. The market could reach $120 billion by 2030, up from about $7 billion today. To succeed, experts say India must reduce its reliance on China, develop its own supply chains, and secure key materials needed for EV production. "India's EV industry has a great chance to grow. But success will depend on how quickly we build strong local capabilities,"  Gupta reportedly stated.

(Business Correspondent)