Samvardhana Motherson Sees no Material Impact From US Tariffs

On the back of a localised and decentralised strategy for global markets as well as a significant presence across geographies, auto component major Samvardhana Motherson International Ltd (SMAIL) sees no major impact from the US President Donald Trump’s decision to raise the tariff on imports from India to 50%.

“In light of the recent shift of tariff policies towards India, we do not foresee any material impact,” SMAIL Director Laksh Vaaman Sehgal told investors on Wednesday. The management believes that the company’s globally local business model enhances resilience and helps withstand economic and geopolitical uncertainty.

“In relation to the evolving trade policies, I would like to highlight that Motherson is well-positioned to navigate this landscape. We have a globally local strategy, and hence a significant level of our production is in the local country of consumption,” he said.

“As a result of this, the majority of our sales to customers in the US are USMCA-compliant. For the non-compliant parts, we are engaged in fruitful discussions with our customers to pass on some of these tariff-related impacts, albeit with a lead-lag effect.”

SMAIL’s exports from India to the US market were less than $10 million (approximately Rs 87.4 crore) during the first quarter, while the company reported a consolidated revenue from operations of Rs 30,212 crores, which is approximately $3.32 billion. In the financial year 2025, exports from India to external customers accounted for only 1.2% of the entity’s total turnover.

SMIL, which clocked Rs 1.14 lakh crore in annual revenue in FY25, operates its business through five segments - Wiring Harness, Vision Systems, Modules and Polymer Products, Integrated Assemblies and Emerging Business. The automotive business currently accounts for around 72% of the company’s revenue.

While the first four segments serve the automotive sector, the emerging business diversifies into non-automotive solutions. These include elastomers, lighting and electronics, precision metals and modules, and technology and industrial solutions, catering to industries like aerospace and healthcare.

Geographically, North America accounts for around 33% of the wiring harness business, while vision systems, modules and polymer products and integrated assemblies account for 21%, 18% and 25%, of the company’s business, respectively. 

“So $10 million is the approximate size of the parts that are flowing from India to US. For the other parts, movement of goods from other parts of the world to US, the majority of them will be happening in Mexico, which will be compliant under the USMCA piece,” management said.

The company noted that for parts that don't comply with USMCA rules, it is in the process of negotiating agreements with customers to pass on the related costs. These negotiations are progressing with some lag. The company is also developing new supply chain solutions to address this issue.

SMAIL highlighted that its operations in 44 countries, supported by local teams, manufacturing, and supplier ecosystems, significantly reduce risk and enhance the company's ability to adapt to region-specific challenges.