Auto stocks jump 3% after Trump floats tariff exemptions

India’s auto shares jumped more than 3 per cent on Tuesday and were set for their best day since early January, after US President Donald Trump suggested he might grant exemptions on auto-related import tariffs.

Speaking on Monday at the White House, Trump said he was considering a modification to the 25 per cent tariffs imposed on foreign auto and auto parts imports from Mexico, Canada and other places.

Those tariffs could raise the costs of a car by thousands of dollars, and Trump said car companies “need a little bit of time because they’re going to make ’em here.”

Shares of auto parts makers rose the most on the auto index , which was last up 3.3 per cent .

Samvardhana Motherson, India’s biggest component maker by market capitalisation, jumped 7.7 per cent, while Bharat Forge and Sona BLW rose around 6 per cent and 7.3 per cent, respectively.

Tata Motors, whose luxury unit Jaguar Land Rover (JLR) gets about a quarter of its sales from the U.S., rose 5 per cent. It was the second-biggest winner on the auto index and among the biggest winners on the blue-chip Nifty 50, which was up over 2 per cent.

The 15-member auto index, which had fallen nearly 11 per cent since Trump announced his auto tariffs on March 26, has since narrowed the decline to 2.5 per cent.

US-reliant auto stocks pared their losses to between 6 per cent and 12 per cent, with Samvardhana posting the smallest loss and Tata Motors recording the steepest drop.

Trump’s latest comments came days after he said he would pause “reciprocal” tariffs imposed on dozens of countries for 90 days.

Nomura said in a note on Friday they expect Indian suppliers to benefit from the pause on tariffs, as U.S. automakers look to source parts outside of China amid tit-for-tat tariffs between Washington and Beijing.

Ten of the 15 Nifty auto stocks are rated “buy” on average, with the rest rated “hold”, according to data compiled by LSEG.

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Published on April 15, 2025