Truck Rental Rates in India Drop 3-4% as US Tariffs Pressure Industry

Decline Extends into Second Month

Truck rental rates in India fell again in August. The drop was 3-4%, following a similar decline in July. The reason is clear. The United States has imposed a 50% tariff on Indian imports. If the tariffs last another month, analysts warn the impact could mirror the slump seen during the Asian crisis of 1998.

Freight Routes Show Sharp Cuts

The fall is visible across major routes. A Delhi-Kolkata round trip for a 28-tonne commercial truck now costs Rs. 2,10,000, down from Rs. 2,17,000. Delhi-Hyderabad freight fell to Rs. 2,25,800 from Rs. 2,35,000. On the busy Delhi-Mumbai corridor, truck rental rates slipped to Rs. 1,91,000 from Rs. 1,96,000.

Slower Movement of Essential Goods

The slowdown has hit vegetables like potatoes, onions, and tomatoes. Arrivals at Agricultural Produce Market Committees in cities are down. Consumer durables and electrical goods, normally stocked before festivals, are also moving slowly. Truckers report cargo loads down by 8-10%.

Monsoon Adds to Trouble

Heavy rains have disrupted transport. Flooded roads and damaged highways delay trucks. Operators face higher costs. Tires fail more often and fuel use rises per trip.

Fleet Owners Turn to Contracts

Fleet owners now prefer long-term contracts. Deals last three to five years. Revenues stay steady but profits are lower. The model offers tax benefits too, with a 40% depreciation allowance in the first half of the fiscal year.

Expansion Stalls, Finances Strain

Fleet expansion has stopped. Dealers hold unsold stock for 30 to 40 days. Banks and NBFCs offer loans at 8-9%, yet few buy new vehicles. Defaults are rising and repossessions are up, especially in northern and eastern states.

Industry Looks for Relief

The trucking industry hopes for government support. GST cuts and income tax exemptions up to Rs. 12 lakh are promised before Diwali. But global factors weigh heavier. US tariffs and possible EU sanctions on Russian oil will decide if demand for commercial vehicles can recover.

Conclusion

Trucks in India keep moving, but with smaller loads and tighter margins. Unless tariffs ease and demand returns, the trucking industry risks one of its hardest periods in decades.

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