Trump's Tariffs Impact On Indian Stock Market.

Trump's Tariff Shock: Will Indian Automotive Stocks Crash?

One of the most concerning issues revolving around economy & geopolitics lies on a single question. And that question is: Would Donald Trump going to impose reciprocal trade tariffs on Indian goods on 2nd of April 2025 or not? As US president often found speaking about imposing reciprocal tariffs, its most likely to occur. And if Trump announces the tariffs on 2nd April 2025 on India, the automotive industry of the country would be one of the most adversely affected one which would directly impact the earnings of major automotive and components manufacturing companies. Out of them those companies which rely heavily on exports for their revenue would be most affected. So, let’s discuss those top 5 stocks which could be impacted by Trump’s tariffs and if you own any of them what could you do to safeguard your investments!

Tata Motors Ltd

Market-Cap :- ₹251,020 crore (Large Cap) Dividend Yield: - 0.92%

Closing Price :- ₹689.60 Current Trend(1Y) :- Down Trend

1 Year Return :- -28.2% Investor Type: - Value Investors

Tata Motors is already in news due to a huge correction in its stock prices because of various reasons such as anticipated entry of Tesla in India, disappointing quarterly results and intensifying competition in India’s EV industry. As more than 70% of the entire Tata Motors’ revenue comes from its Jaguar Land Rover (JLR) division, the company would surely be going to see huge declines in its revenue if tariffs were imposed. This is because North America is the largest market for JLR for its sells. In FY 2023 Tata Motors sold 81,629 units of JLR and 105,623 in FY 2024. At the same time the company is facing huge challenge for its JLRs in China due to cheap and more featured EVs and if tariffs were imposed on India it would be a nightmare for the Tata Motors.

Motherson Sumi Wiring India

Market-Cap :- ₹23,348 crore (Mid Cap) Dividend Yield: - 1.51%

Closing Price :- ₹53 Chart Trend (1Y): - Down Trend

1 Year Return :- -15.72% Investor Type: - Movementum & Div. Investors

The company is a major supplier of wiring harnesses products to both domestic as well as global automotive companies. The company currently have only a single product line, and about 58% of it is used only in passenger vehicles. If tariffs were imposed, the cost of exporting its wiring harness products to the US would be shoot-up and forces the company to restructure its supply chain either in the US where manufacturing costs are already high or in other country with lower trade barriers.

Maruti Suzuki India ltd

Market-Cap :- ₹365,369 crore (Large Cap) Dividend Yield: - 1.08%

Closing Price :- ₹11,727.30 Chart Trend (1Y): - Consolidated

1 Year Return :- 0.76% Investor Type: - Defensive Investors

The company is the dominant player in India by sales and market-cap. The company exports its automobiles to over 100 countries and sold nearly about 280,712 units in FY 24. However, company exports only contribute about 6% only on sales basis and don’t have huge volumes of exports to the US. But if tariffs were imposed on India and China for sure, then several Chinese car makers and other existing car makers of India such as Kia, Hyundai and other would disrupt the Indian market. Eventually lead to intense competition and Chinese auto makers could even capture a huge market share in India’s EV industry.

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Uno Minda ltd

Market-Cap :- ₹58,114 crore (Mid Cap) Dividend Yield: - 0.20%

Closing Price :- ₹978.80 Chart Trend (1Y): - Up Trend

1 Year Return :- 53.66% Investor Type: - Conservative Investors

This company is a major player in the auto components manufacturing with manufacturing capabilities presence in more than 70 countries. The company produces diverse range of products for lighting, seating, casting, acoustic and more. The company has partnered with several country’s automobile companies such as Germany, Korea, China and Japan for supplying various auto ancillaries. Trump's tariffs could directly hurt the company because major OEMs brands such as Toyota, Volkswagen, Honda and many more rely on Uno Minda for supply of components for their manufacturing facilities at United States. Due to tariffs, the costs of importing auto components would increase which could either lead to loss of contract for Uno Minda Ltd or force the company to make investments in the US itself.

Bharat Forge ltd

Market-Cap :- ₹54,208 crore (Mid Cap) Dividend Yield: - 0.77%

Closing Price :- ₹1,194.80 Chart Trend (1Y): - Consolidated

1 Year Return :- 7.57% Investor Type: - Cyclical Investors

The company is a dominating force in various sectors such as automotive, forging, defense and many more. The company is the largest automotive exporter of India and about 25% of its revenue comes from United States alone. Although the company has a well-diversified product range but its automotive, defense, and industrial components have a huge market in The United States. If tariffs were imposed the company might feel short-term revenue losses due to high costs of imports in the US, but it could easily tackle it by expanding its already existing facility in the US itself.

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What Investors should Do to Avoid Their Losses?

Well, till the time tariff is not yet confirmed to be imposed on India, on 2nd of April 2025, it would be confirmed. But as per the current scenario their are less chances that Trump may impose tariffs on India because their is been constant discussion is going at official levels of either a free trade agreement(FTA) or a small-trade pact between the US and India. And in case if tariffs were imposed it might cause short term corrections in several sectors such as automotive, pharmaceuticals and minerals due to a larger market is being US. But the tariffs were not only be imposed on India only but other countries as well. So there would not be a long term negative implications as US and India enjoys good relations between them and both the countries are trying to increase their trade. So its not a matter of huge concern as a matter of fact it might even bring the investors with a good opportunity to average their portfolio.

DISCLAIMER: we are not SEBI –registered, all the above information is for education purpose only, consult with your financial advisor or do your own research before investment.