Trump tariffs: Full confidence in govt's ability to protect national interests: Maruti Chairman R C Bhargava

Bhargava also observed that the India-UK FTA should form a template for future agreements.

Amid a wave of tariffs imposed by US President Donald Trump on countries across the world, including India, Maruti Suzuki India Chairman R C Bhargava said that he is fully confident of the Indian government's ability to protect national interests.

On July 30, Trump announced a 25% tariff on Indian imports to the US, effective August 1, along with an unspecified "penalty" due to India's purchase of Russian oil and military equipment. On August 5, he even warned India about substantially raising tariffs over the next 24 hours owing to New Delhi's import of Russian oil.

"The world is experiencing a level of uncertainty perhaps never experienced before. President Trump has in many ways forced nations to rethink conventional policies and relationships. In particular, the use of tariffs in diplomacy is being seen for the first time," Bhargava told shareholders in Maruti's FY25 Annual Report.

"India, during the process of negotiating a bilateral treaty with the United States, has been subject to high tariffs. I have full confidence in the ability of our government to protect national interests and do what would be best for the country," he added.

On rare earth magnets, he said that the situation created by the decision of the Chinese government to provide that export of rare earth magnets would need licenses, has added another element of uncertainty for the automobile industry. "We are hopeful that the licenses for the export of these magnets will be issued shortly. Your company has so far managed to ensure that no production was lost due to a shortage of magnets," he noted.

Maruti is planning to introduce two new SUVs this year, with one of them being a battery electric vehicle (BEV), the e Vitara, for both the domestic and export markets. However, the e Vitara's production plans, particularly in the first half of the fiscal, were hampered by the short supply of rare earth magnets.

A global model, the e Vitara will be manufactured at Maruti's Gujarat plant and exported to over 100 countries, including Japan and European nations.

Bhargava observed that the free trade agreement (FTA) with the United Kingdom should form a template for future agreements. "I expect that such agreements would help in the successful implementation of our policy of seeking export markets to expand production," he said.

The India-UK FTA, signed on July 24, will mostly benefit uber-luxury carmakers like Rolls-Royce, Aston Martin, Bentley, McLaren and Lotus. The impact will not be significant on Tata Motors-owned Jaguar Land Rover (JLR) as it is already making vehicles in India and importing its best-seller, the Defender, from Slovakia.

However, Bhargava pointed towards the fact that the growth rate of the car industry has become a matter of considerable concern. "Over the last six years, starting from the implementation of BS 6 standards, and followed by more strict safety and emission standards, the average growth of the industry has been 4.4% a year. In FY25, retail sales growth was 3% and in Q1 FY26, there has been a de-growth of 1.3%," he said.

"This slowdown in the car industry has happened despite the country experiencing the highest GDP growth amongst large countries, and calls for serious consideration. Our penetration of cars at 34 per thousand of the population is very low. Two-thirds of the population is dependent on two-wheelers for their mobility needs. It is also well accepted that the car industry is the driver of economic growth and employment creation, as evidenced in all major developed economies," he added.

Referring to China's advancement in the automobile sector, Bhargava said that despite being a communist country, it treated vehicle ownership as an enabler of urban mobility and economic growth, and has become the largest producer of cars in the world.

"The (Chinese) government offered infrastructure incentives, R&D grants, and consumer subsidies, besides other facilities, to grow this industry. As a result, between 2000 and 2017, car production grew from 2 million units a year to 25 million units. The GDP also grew at a fast rate," he said.

In comparison, India's car production stood a little over 5 million units in FY25, according to data from the industry body Society of Indian Automobile Manufacturers (SIAM).

"In Japan, during 1955-70, rapid economic growth was accompanied by high growth of car production and sales," Bhargava said, questioning whether India should also not adopt policies that facilitate the growth of the car industry.