50% US tariffs will not distract CNH from doing the right thing in India: CEO Gerrit Marx

Agricultural and construction equipment maker CNH is doubling down on its India plans by setting up its fourth plant in the country, even as its exports to the United States now face 50% tariffs.

“The tariffs will not distract us from doing the right thing in India, a key region for us,” Gerrit Marx, Global CEO of CNH, the maker of New Holland tractors and CASE construction equipment, told reporters on Tuesday.

CNH has three manufacturing plants in India, including a tractor manufacturing unit in Noida. It is now scouting land to set up its fourth plant, which will be the second tractor factory. The Noida site produces about 51,000 tractors in a year. In 2024, nearly 37,000 tractors were sold in India and the rest were exported, of which 30% went to the US.

CNH halted export shipments to the US market after 50% tariffs announced by US president Donald Trump came into effect.

“At the current 50% tariff, you don’t export. We have enough stock of India-made machines in the US,” Marx said, adding that the North American market is already slow due to the impact of tariffs.

“Given that the market goes slow and we have a decent level of stock of these machines already in the US. We have stopped shipping at this point and awaiting the real deal to come up,” said Marx.

“We have enough stock for half a year. But before we run too low, our stock levels, we would start shipping and maybe ship products at a loss,” he added. “If we need to take a loss for a small amount of machines because of the tariffs, then so be it. We are for the long term. We want to be pound smart and penny foolish and do the right thing,” he explained.

While CNH has a small market share of 4.5% in India’s total tractor sales of 9 lakh units annually, the company plans to take it to 10% by the end of the decade.

“The Noida plant will be maxed out very soon in terms of capacity. We are looking at scenarios to add another plant in India, a fourth plant,” said Marx. “We will buy more land. We have negotiations going on.”

CNH is positioning India as a centre for production and exports. “There is strategic imperative to be in India, to compete in India and win in India so that when we compete with other Indian players outside of India, we have the same secret sauce,” Marx explained.

When asked why CNH has not been able to build a strong presence in India despite being in the country for over two decades, Marx said India was not given the level of priority in the past as a market to sell, as a place to engineer, as a place to source and as a place to export from. “In the past, the relevance wasn’t given. We have not looked at India in its entirety of potential it can offer to a company like ours.”

“We are giving the leadership and authority over several product lines to our teams in India to engineer for India and for exports,” he added.