Global Tariff Tremors Likely To Benefit India In The Long Term, Says Mercedes-Benz India CEO

The Indian auto industry, particularly the luxury segment, remains largely insulated from the direct effects of the tariff battle, especially the one driven by US President Trump, Santosh Iyer noted.

 However, global uncertainties—ranging from geopolitical instability to currency fluctuations and supply chain disruptions—have injected a sense of caution into the market, he pointed out.

Source : Freepik

India could emerge as a long-term gainer from the ongoing global tariff conflict, with the possibility of improved trade flows and fewer restrictions, Santosh Iyer, Managing Director and CEO of Mercedes-Benz India, said on Sunday.

While the immediate future might see disruptions, Iyer commented that the broader picture looks promising for the country’s economy.

The Indian automotive industry, particularly the luxury segment, remains largely insulated from the direct effects of the tariff battle, especially the one driven by US President Donald Trump, the executive told PTI.

 However, global uncertainties—ranging from geopolitical instability to currency fluctuations and supply chain disruptions—have injected a sense of caution into the market, he pointed out.

Luxury Segment Likely To Remain Stable

“We in the automotive segments are not directly impacted. Most of the cars are made here as such. That's not the biggest impact,” Iyer said. Yet, indirect consequences, such as a weaker rupee, have pushed automakers to raise prices—especially in the luxury category. This, he noted, could influence customer demand moving forward.

Still, Iyer remained optimistic about consumer sentiment, particularly in key export hubs like Agra. “At this stage, we expect the market to be a bit flattish or maybe some growth may still come in from the market,” he said, noting that the mood among luxury buyers has not turned negative.

The first quarter of 2025 has seen the luxury car segment hold steady, with flat growth, Iyer said. He added that the trend is likely to continue unless global trade conditions improve significantly in the latter half of the year. “If things are sorted and if there are trade agreements in place, then you can look at a positive upside to the market,” he remarked.

Trade Liberalisation Could Be a Long-Term Win for India

According to Iyer, discussions around opening India’s borders for two-way trade could mark a significant shift. “For the first time, we are discussing about opening up of our borders and also opening for two-way trade. Generally, we have always advocated for more open and fair trade policies that help foster global economic growth and drive innovation as well,” he said.

He emphasised the importance of cooperation among large economies to reduce trade barriers. “Surely, we support cooperation among the larger economies to reduce the trade barrier and they should help in the long run. In the short term, there may be shocks, but in the long run, better trade and lowering of the trade barriers and better two-way movement of goods and services is always beneficial for the economy as such,” Iyer stated.

The Mercedes-Benz India chief remained confident about the country’s position in the evolving global order. “There is an increased confidence that trade will continue and India will only benefit more from the current geopolitical setup. So overall, we still see the sentiments to be there,” he said.

Projections for FY25 stated that the luxury car market in India is expected to reach over 51,500 units, a modest increase from approximately 49,800 units in FY24.