US Doubles Tariffs to 50%: Morgan Stanley Warns of 30% EBITDA Drop for Bharat Forge

Headlines:

– The United States has enacted a steep 50 % tariff on Indian exports, effective August 27, 2025.

– Global brokerage Morgan Stanley estimates a nearly 30 % EBITDA hit for Bharat Forge and about 10 % for Balkrishna Industries due to heightened tariff exposure.

Key Details up Front:

Morgan Stanley's sector analysis reveals that 38 % of Bharat Forge’s standalone revenue and around 10 % of Balkrishna Industries’ FY 2025 revenue stem from the US market. With tariffs now at 50 %, estimated EBITDA declines are substantial: –30 % for Bharat Forge and –10 % for Balkrishna Industries.

Background & Impact

Before the tariff hike, both firms were already subject to a 25 % duty—mostly passed on to customers. The new additional 25 % levy, tied to US concerns over India’s Russian oil imports, doubles that burden. Now, around 30 % of Bharat Forge’s revenue and 10 % for Balkrishna Industries face the full 50 % charge, sharply cutting margins.

Market Reaction

Despite the looming earnings hit, Bharat Forge shares gained modestly, closing 0.23 % higher at ₹1,124.50, while Balkrishna Industries edged down by 0.16 % to ₹2,320.40.

Wider Trade Context

The US tariff escalation marks the latest turn in the 2025 US–India trade crisis. The second 25 % duty was imposed on August 27, adding to the earlier reciprocal levy, and delivering one of the harshest trade shocks India has faced. Analysts warn that such trade barriers could undermine India’s manufacturing ambitions and exports, especially in auto parts and capital goods.

Looking Ahead

India now faces strategic and economic pressure. Exporters are seeking new markets and support from the government. The automotive parts sector, represented by firms like Bharat Forge and Balkrishna Industries, stands at the epicenter of this tariff storm. The coming quarters will test their resilience and India’s broader export strategy.