The European Union has urged India to eliminate tariffs on car imports as part of a long-standing trade deal, with reports suggesting that the Indian government is prepared to enhance its offer to finalize the agreement.
According to a Reuters report citing two industry sources and a government official, India is considering reducing tariffs from over 100 percent to 10 percent in phases. However, local automakers are advocating for a minimum 30 percent tariff and a delay in any changes to electric vehicle (EV) import duties for the next four years to safeguard their businesses.
Here are a few stocks that will face the maximum impact from this development
Tata Motors Ltd
With a market capitalization of Rs.2.7 lakh crore, the shares of Tata Motors Ltd currently at Rs.673.30 per equity share on Tuesday, rising nearly 0.80 percent from its previous day’s close price of Rs.668.15 apiece.
Tata Motors is facing growing competition from European brands and Tesla, particularly in the premium and electric vehicle (EV) segments. A reduction in tariffs could potentially erode the company’s market share and weaken its pricing power for domestic models. This concern has already impacted Tata Motors’ stock, with shares dropping by 10 recently in response to similar global tariff developments.
Mahindra & Mahindra Ltd
With a market capitalization of Rs.3.6 lakh crore, the shares of Mahindra & Mahindra Ltd currently at Rs.2,920.00 per equity share on Tuesday, falling nearly 0.36 percent from its previous day’s close price of Rs.2,930.60 apiece.
Mahindra & Mahindra Ltd is expected to encounter increased competition in the SUV and EV segments as import tariffs are reduced. While analysts believe the immediate threat from Tesla is limited due to differences in product offerings and pricing, the long-term risk persists. As imported vehicles become more affordable, Mahindra may face growing pressure in its core segments.
Maruti Suzuki India Ltd
With a market capitalization of Rs.3.7 lakh crore, the shares of Mahindra & Mahindra Ltd currently at Rs.11,773.00 per equity share on Tuesday, falling nearly 0.62 percent from its previous day’s close price of Rs.11,846.00 apiece.
As a dominant player in the mass-market segment, Maruti Suzuki could face pressure if global automakers begin targeting the mid-range category with competitively priced imports. Nonetheless, the company’s robust domestic manufacturing capabilities offer a degree of insulation, helping it remain cost-effective and better positioned to withstand rising competition.
Samvardhana Motherson International Ltd
With a market capitalization of Rs.95,834 crore, the shares of Samvardhana Motherson International Ltd currently at Rs.135.93 per equity share on Tuesday, rising nearly 0.75 percent from its previous day’s close price of Rs.134.99 apiece.
Samvardhana Motherson, a prominent global Tier-1 automotive supplier, manufactures critical components like wiring harnesses, mirrors, and polymer modules for major automakers such as Daimler and Audi. If India reduces import duties, foreign carmakers may opt for importing fully built units instead of assembling locally. This shift could dampen demand for Motherson’s India-made parts, though its global footprint provides some cushion.
Bharat Forge Ltd
With a market capitalization of Rs.53,816 crore, the shares of Bharat Forge Ltd currently at Rs.1,125.00 per equity share on Tuesday, rising 0.72 percent from its previous day’s close price of Rs.1,117.10 apiece.
Bharat Forge is widely recognized for producing high-performance forged components for engines, chassis, and suspension systems, serving both commercial and passenger vehicle segments worldwide. As a key exporter to markets like the US, it plays a vital role in the global supply chain. However, a cut in India’s auto import duties could lead to increased imports of fully built vehicles, potentially reducing domestic demand for its components, even as its export business remains strong.
Written by – Siddesh S Raskar
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