Auto Stocks Rally on India-UK FTA Optimism; Tata Motors, Eicher, TVS in Focus

Auto stocks, including Tata Motors, Eicher Motors, and TVS Motor Company, are witnessing strong buying interest in Wednesday’s trading session, buoyed by positive sentiment following the recently concluded India-UK Free Trade Agreement (FTA).

Tata Motors is leading the gains, with Bharat Forge, Ashok Leyland, TVS Motor Company, and MRF also trading higher. Nearly two-thirds of the Nifty Auto index constituents—around 10 out of 15—are currently in the green.

While overall trading volumes in the auto segment remain moderate, the FTA is expected to impact the premium vehicle segment significantly. Under the agreement, the UK government announced that Indian tariffs on automotive imports will be slashed from over 100% to just 10%. Additionally, both nations will establish import quotas to regulate automotive trade.

This landmark move is expected to make luxury British automobiles more accessible to Indian consumers.

Auto Company Highlights

• Tata Motors is expected to benefit through a potential sales boost for its luxury brand, Jaguar Land Rover (JLR), in India.

• Eicher Motors, which owns Royal Enfield, stands to gain from its established presence in the UK, with expectations of improved margins and volume growth.

• Other Indian auto firms are poised to become more competitive in the market, thanks to the reduced import costs.

This FTA marks the first comprehensive trade deal between India and the UK and is aimed at doubling bilateral trade to $120 billion by 2030. Trade between the two nations has already risen from $20.36 billion in FY23 to $21.34 billion in FY24.

Also Read: How Different Sectors are Likely to Impact After India–UK Free Trade Agreement?

Conclusion

Indian exports to the UK—especially in apparel, auto components, and chemicals—are projected to see a sharp uptick by 2027 due to the favourable terms secured under the agreement.

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