Ford to Invest Rs 3,250 Crore in India Despite US Push

• Ford will invest ₹3,250 crore to reopen its Tamil Nadu plant and produce over 200,000 engines
• The move shows Ford’s renewed confidence in India despite U.S. trade tensions
• It marks a strategic comeback after Ford’s 2021 exit from India

Ford Motor Co. intends to invest around ₹3,250 crore ($370 million) into India to manufacture new engines, expressing renewed faith in the country’s output potential, despite renewed pressure from domestic American politicians to concentrate on production in the U.S.

The company is set to reopen its Maraimalai Nagar plant in Tamil Nadu, which was closed four years ago, and retool it for the production of luxury high-end engines, for exports. This facility will have a capacity annual output of over 200,000 units, but Ford is yet to reveal which countries will receive the engines. An official announcement could be made as early as this week. 

Ford India investment highlights renewed confidence in the country’s auto sector, as Ford manufacturing India expands despite Trump US manufacturing policies, boosting foreign investment and dominating automobile industry news.

Ford's next move comes after its extended planning in light of the current - and past - strained U.S.-India trade relationships.  Earlier this year, President Donald Trump placed a 50% tariff on Indian imports and cited the Indian government for purchasing oil from Russia.

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While Trump pushed for more Americans to produce items in the United States, Ford's move reflects its global strategy for the long-term expectations for India to be a manufacturing hub, and it believes in India's potential. Ford declined to comment on the plans.

This investment shows a change of direction under CEO Jim Farley, who is turning Ford back toward traditional manufacturing after an alternate focus on electric vehicles. Ford began operations in India in the vicinity of Chennai in 1995 and expanded to Gujarat, but exited in 2021 after incurring substantial losses of more than $2 billion.

Ford sold its Sanand vehicle manufacturing plant to Tata Motors, which has now established an EV production line there. The company's return is consistent with an overall trend of U.S. companies increasing manufacturing in India, notwithstanding existing geopolitical frictions. . Apple, for example, has expanded the localization of iPhone production in five of its factories in India.

Tamil Nadu remains as one of India's key automotive hubs with assembly plants from manufacturers such as Hyundai, Renault, and BMW. Ford's renewed investment there emphasizes India's increasing importance as a global manufacturing base and indicates a change in the business model for the company after years of retreat in emerging markets.