Gurbani Bagga, Partner at Boston Consulting Group, has outlined a strategic roadmap for India's automobile sector following the recent India-US trade deal. Speaking in New Delhi on 12 February 2026, she emphasised the need to increase exports amid evolving global trade dynamics.

Her insights, shared via ANI, highlight opportunities arising from both the India-US agreement and the India-EU Free Trade Agreement (FTA).

Bagga launched a BCG report titled Bolts, Bolts, Bytes and Bots, which examines transformations required in India's auto supplier landscape. The report stresses adapting to technological shifts and supply chain demands driven by these pacts. It positions India to capitalise on preferential access for auto components in key markets.

The India-US interim trade framework, initiated under Prime Minister Narendra Modi and President Donald Trump in February 2025, offers limited tariff concessions on select US vehicle imports.

Duties on large internal combustion engine cars over 3,000cc will drop from 110% to 50% initially, tapering to zero over a decade via quotas. This selective opening prioritises premium and electric models while maintaining affordability barriers for mass volumes.

More critically for India, the deal grants preferential access to Indian auto components, eases select Section 232 tariffs, and tackles non-tariff barriers. India commits to reducing tariffs on US industrial goods and agriculture, with the US applying 18% reciprocal tariffs on Indian exports—potentially removable upon full Bilateral Trade Agreement (BTA) conclusion. This framework bolsters India's integration into resilient global supply chains.

Complementing this, the India-EU FTA reshapes the automotive outlook by facilitating exports, technology transfers, and manufacturing hubs. Experts like Ajay Bagga note that while cheaper luxury imports draw attention, true gains lie in Indian firms leveraging Europe as a production base. Equity markets reacted positively, with the BSE Sensex and Nifty gaining on FTA news.

Union Minister Jitin Prasada hailed both pacts at the ACMA Automechanika fair, calling them game-changers for auto components. He urged industry collaboration with government to seize wider overseas market access amid global uncertainties. ACMA President Vikrampati Singhania echoed this, anticipating enhanced competitiveness and technology ties.

Bagga's roadmap advocates overhauling the supplier ecosystem to meet export targets, drawing from BCG's analysis of $21 billion in 2024 auto component exports aiming for $100 billion. Focus areas include digitalisation, AI integration, and premiumisation to align with US and EU demands. This positions India as a global hub, reducing reliance on domestic sales.

Challenges persist, including rupee pressures and foreign investor outflows, yet sentiment remains optimistic. The pacts signal India's strategic pivot towards export-led growth in autos, engineering, and components. Implementation will hinge on policy certainty and industry agility.

As the supplier landscape evolves per BCG's Bolts, Bolts, Bytes and Bots, firms must invest in EVs, autonomy, and sustainability. Bagga's vision underscores timely action to convert trade deals into sustained economic momentum. India's auto sector stands at a pivotal juncture for global prominence.

Based On ANI Report