Bharat Forge Expands US Production Amid Tariff Concerns and Defence Growth

31 Mar 2025 , 03:44 PM

Pune-based auto components major Bharat Forge is ramping up its production of passenger car components at its domestic manufacturing plants in the US. This move by the company is aimed at mitigating the uncertainty associated with changes in trade policy, while also bolstering its presence in the international automotive arena.

Bharat Forge Chairman and Managing Director Baba Kalyani said there are major growth opportunities in the automotive component space for the company. He noted the company’s enhanced capacity and that it plans to increase production.

About 20% of Bharat Forge’s auto component exports are to the US. In light of the US’s impending 25% tariff on imported automobiles, which is generating a state of confusion for global auto exports, the OEM is watching developments closely.

It is still unclear if tariffs will apply to components for Class 8 trucks. The company will only know the components affected after the customs order is issued, Kalyani said.

Switching suppliers and auto plants, Kalyani pointed out, takes time usually 3- to 4-yearslong and that period helps drown out short-term shutdowns resulting from an abrupt shift in trade policy.

Apart from defence, Bharat Forge has a major presence in India’s defence sector and recently won a ₹6,900 crore artillery order where it’s share will be ₹4,100 crore.

The execution of the contract is for a duration of three years, but Bharat forge will execute it in two years at max after receiving the stage-1 approval. In addition, the company is also targeting long-term growth opportunities in India’s artillery modernisation programme, worth ₹70,000 crore. Apart from armoured vehicles and infantry combat vehicles, Bharat Forge is also expected to participate in a range of defence programs.

Bharat Forge has a ₹10,000 crore defence order book, which will ensure meaningful growth going forward in the defence segment. The company is also in process of restructuring its overseas subsidiary, which it expects will be resolved in Q1FY26 (April-June 2025) quarter.