India-UK FTA: Automobile stocks up after the signing of trade deal

The auto-component industry which exports around $757 mn worth of parts to that country may benefit from the trade deal

The BSE Auto index rose 1.74 per cent on Wednesday, driven by stocks like Tata Motors (up by 5.05 per cent), Bharat Forge (up by 5 per cent), Mahindra & Mahindra (up by 1.64 per cent) and TVS Motors (up by 0.5 per cent), as India and the United Kingdom signed the final terms of a free trade agreement (FTA) on May 6 after a three-year negotiation period. 

 

Companies like Tata Motors are set to gain from this as UK-based carmakers will benefit from a quota that reduces tariffs from over 100 per cent now to 10 percent. Further, the