New Delhi:
US President Trump has announced to impose 25% tariffs on vehicles imported in the US, which is visible on the shares of India’s auto companies. There is pressure on the shares of almost all auto companies. The most impact is visible on the shares of the promotion of Mamarason, Tata Motors, Ashok Leyland, Bharat Forge, Eicher Motors and Mahindra.
Nifty’s auto index broken more than 2%
The Auto index of the Nifty broke more than 2% due to the decline in auto shares. As soon as the market opened, Tata Motors shares broke up to 6.5%, it made a low of Rs 661.10 in Intrade. Due to this decline, more than Rs 10,000 crore was cleared from the market cap of Tata Motors. Promotion Madrasan declined by 7.6%, in Intrade to Rs 124.73. Ashok Leyland’s stock broke around 4.5% to Rs 205.17, Bharat Forge’s stock also broke more than 2% to 1,129.85.
Trump said- no conversation will happen now
President Trump on Wednesday signed an announcement to implement auto tariffs. Trump’s intention behind this tariff is that more and more manufacturing jobs should be born in America, but it has put the concerns of the trade war up one notch. These tariffs will be implemented from next week. Trump said at the White House on Wednesday, “What we are going to do is 25% tariff on all cars made in America.
President Trump said that this tariff will come into effect from April 2 and America will start collecting it from the next day. The White House said that this tariff will not only apply to fully assembled cars, but will also apply to major automobile parts, such as engines, transmission, powertrain parts and electrical components
This list can also be longer over time, in which some more parts can also be included. Trump described these tariffs as “permanent” and said that he is no longer interested in talking about any kind of discount.
A large part of earning comes from US
Now the question arises that why the shares of Indian auto companies are seeing such a decline, in fact, some part of the income of India’s auto companies comes from America. For example, Bharat Forge acquires 25% of its total income from the US. Promotion Madrasan also brings 18% of its total income from the US itself. Sona BLW’s share which is broken up to 6.8% today, and has reached a 52 -week low of Rs 463, 40% of its income comes from the US itself.
Currently, the US imposes 2.5% tariff on automobiles and auto parts to be imported from India, while India charges 110% (70% basic custom duty and 40% cess) on fully made cars, while India imposes 15% tariff on auto parts.