Ford Commits $370 Million Investment in India Despite Trump’s Push for US Manufacturing

As the US automaker revives a plant it closed four years ago, Ford Motor Company intends to invest roughly INR 3,250 crore ($370 million) in India to produce new engines, according to a report by Bloomberg. According to a source who asked not to be identified because the plans are confidential, the Maraimalai Nagar manufacturing facility in the southern Indian state of Tamil Nadu will be retooled to produce high-end engines for international markets with an annual capacity of over 200,000 units. The report further stated that an announcement is anticipated as early as this week. The engines will not be transferred to the United States, but it is unclear to which nations they will be shipped.

Trump’s High Tariffs are Ignored by Ford

In the midst of increased tensions between Washington and New Delhi, the US automaker has been preparing the investment for months after first expressing interest in resuming local manufacture in India a year ago.

In a trade spat earlier this year, US President Donald Trump imposed a 50% duty on Indian imports and retaliated against the Asian nation for buying Russian oil. The action was taken at the same time that Trump declared increasing US manufacturing, particularly in the automobile sector, to be a key policy objective.

During his first term, the president criticised Ford for its plan to expand production outside of the US, but more recently, he praised the company for announcing significant investments at its home facilities.

Ford's decision, which comes as the company shifts its attention from electric vehicles to India, underlines CEO Jim Farley's newfound faith in the country as a manufacturing base. In 1995, the Dearborn, Michigan-based company opened its first manufacturing facility close to Chennai. In 2015, it launched a second facility in Sanand, Gujarat.

Ford Cancelled Deal with Mahindra

An agreement with Mahindra & Mahindra Ltd. that would have kept Ford cars on Indian roads was terminated by Farley shortly after he was appointed CEO in 2020. Less than a year later, he completely gave up on the market, claiming that it was no longer able to invest in marginal markets with low or no returns, such as Brazil and India. Ford accumulated losses of more than $2 billion by the time it left. In the end, it sold Tata Motors the Sanand vehicle plant, where it currently produces EVs.

Three years after switching to an export-only business model, Ford's main US competitor, General Motors Co., also stopped manufacturing in India in 2020. Despite the political unrest, several US businesses have been increasing their industrial presence in India in more recent years.

Apple Inc. has increased iPhone production across five Indian plants after Trump singled it out in May for choosing to manufacture in India. One of India's most industrialised states and a long-time centre for auto manufacturing is Tamil Nadu, where Ford intends to reopen its former plant. It houses production plants run by BMW AG, Renault SA, and Hyundai Motor Co.