The stocks of auto companies in India are on the rise, giving the Nifty Auto index a boost for the second day in a row. This surge comes after India and the U.S. announced a trade deal framework that could benefit both nations.
On Tuesday, the Nifty Auto index climbed nearly 1.4%, closing at 28,173.20 points. Notably, Samvardhana Motherson International saw its shares jump more than 4%, reaching a new 52-week high after reporting a solid 16.5% rise in net profit for Q3 FY26.
Other companies also saw gains. Tube Investments of India shares increased by over 3.5%, while Ashok Leyland and Uno Minda both rose more than 2%. In addition, Mahindra and Mahindra, Bajaj Auto, and Bharat Forge shares went up nearly 2%.
However, some stocks didn’t follow this trend. Sona BLW Precision Forgings and Hero MotoCorp, among others, faced slight losses.
So, why are these auto stocks performing well? The recent trade deal between India and the U.S. is a key factor. It aims to enhance trade relations, allowing India preferential tariff rates on automotive parts. This could provide a significant boost to local auto component makers.
According to Nomura, a financial services and investment management firm, this agreement, combined with the falling value of the rupee, is set to help Indian auto parts exporters gain a stronger foothold in the U.S. market. Before tariffs were imposed, India accounted for only 2% of U.S. auto parts imports. The trade framework will lower previous tariffs from 25% to a more manageable level, stimulating growth in this sector.
Experts believe that companies like Bharat Forge, Sona BLW, and Balkrishna Industries are well-positioned to profit from this deal. Local demand for commercial vehicles may also rise, benefitting firms such as Ashok Leyland and Tata Motors.
In just two days, the Nifty Auto index has gained over 2%. As markets shift, keeping an eye on this sector could be beneficial for investors.
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Note: The insights and investment advice presented here are based on individual expert assessments and not representative of any specific endorsement.
