A potential rollback of proposed duties on imported auto parts lifted sentiment across Indian auto ancillary stocks.
Indian auto component makers Samvardhana Motherson and Sona BLW rose between 2% to 3% in early Tuesday trading, buoyed by optimism that the U.S. may ease proposed tariffs on the auto industry.
This uptick follows comments from U.S. President Donald Trump, who signaled the possibility of reducing some duties on foreign components used in U.S.-manufactured vehicles and preventing additional tariffs on overseas cars from compounding existing duties.
Trump, who had earlier proposed a steep 25% tariff on imported auto parts effective May 3, now appears to be pulling back slightly, especially to protect U.S. carmakers and their suppliers.
The news has sparked a relief rally in Indian auto ancillary stocks, which had previously been under pressure due to tariff concerns.
Amid prior plans for a substantial 25% tariff on imported auto components starting May 3, Trump seems to be softening his stance, notably to safeguard American automakers and their providers.
This development has triggered a recovery in Indian auto ancillary stocks, which were previously facing downward pressure due to worries about the tariffs.
The U.S. is a significant export market for Indian auto component companies, and any move to soften tariffs is viewed as a major positive for the sector.
Brokerage firm Elara Securities highlighted in their February report that auto component exports from India to Mexico, a key production hub for U.S.-bound vehicles, account for about 3% of India’s total auto component exports, amounting to $656 million.
Data on Stocktwits India show that retail sentiment remains ‘extremely bullish’ on both these counters.
Sona BLW shares fell 21% year-to-date (YTD), while Samvardhan Motherson shares are down 12%.
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