Shares of Tata Motors have surged nearly 5% in the last two trading sessions, propelled by renewed optimism surrounding possible global trade deals that could ease tariffs on car exports. On Thursday, the stock reached a high of ₹706.50, climbing 2.4% on the BSE, for its second consecutive day of gains.
The more comprehensive Nifty Auto index also gained 0.6%, tracking gains in global auto stocks after the critical trade agreement between the United States and Japan earlier this week. The cutting of U.S. tariffs on Japanese cars from 25% to 15% led to speculation that more similar agreements with other regions, including the EU, may be forthcoming.
Trade Deal Momentum Bolsters Sentiment
Observers have become expectant that the United States is prepared to provide similar tariff suspension for the EU, where tariffs are currently 27.5%. Reports are that negotiations are almost complete, and the EU may agree to a 15% tariff to avoid the possibility of a U.S. tariff increase to 30%, although threatened by U.S. President Donald Trump in August 1.
If this occurs, it would have huge implications for Tata Motors’ luxury vehicle division Jaguar Land Rover (JLR). JLR has a large manufacturing facility in Slovakia, where it exports a lot of vehicles to the United States (which makes up about 33% of its overall sales). Any drop in tariffs will have positive impacts on JLR’s pricing and profitability in the US.
It should be noted that since JLR’s headquarters is based in the U.K., it has a 10% tariff due to its own bilateral trade agreement with the U.S. since it is no longer part of the EU. Moreover, any overall tariff cut for EU or Indian exports could still make Tata Motors more globally competitive
Stock Price Action in 2025
Despite this recent surge in price, Tata Motors stock has demonstrated some fluctuations in 2025. The stock is down 6.5% year to date, down 4.6% in the last six months, but is slightly recovering, up 4.8% in the past three months, and up 4% in the past month, which is all supportive of improving investor confidence surrounding renewed optimism in global trade.
Conclusion: The bullish momentum in Tata Motors reflects a broader sense of positivity in the auto sector, on the back of developments in international trade. If a similar tariff-cutting deal is reached between the U.S. and either the EU or India, Tata Motors–specifically JLR–could be a major beneficiary. Investors are set to monitor the negotiations closely in the next few weeks.
