The broader Nifty Auto index climbed 0.6% on Thursday, tracking a global uptick in automotive shares after the United States signed a landmark trade agreement with Japan this week. The US–Japan deal slashed tariffs on Japanese car exports to the US from 25% to 15%, triggering a rally in global auto markets and fuelling speculation of further trade pacts.
Reports suggest that Washington is now close to finalising a similar agreement with the European Union, which could see tariffs on car imports cut to 15% from the current 27.5%. The reports indicated that the EU may agree to this levy to avoid the 30% tariff hike threatened by US President Donald Trump from August 1.
Implications for Tata Motors and JLR
For Tata Motors, whose luxury arm Jaguar Land Rover (JLR) operates a key plant in Slovakia, a reduction of U.S. tariffs to 15% could significantly benefit exports. About 33% of JLR’s volumes come from the U.S. market. The U.K., which is no longer part of the EU, already enjoys a 10% tariff under its separate US–UK trade arrangement.
Shares of Tata Motors have fallen 6.5% so far in 2025. The stock is down 4.6% over the last six months but has gained 4.8% in the last three months. The stock is up 4% in the last one month.
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