Maruti Suzuki, Bajaj Auto to Ashok Leyland: Should You Buy Auto Stocks Amid India-US Trade Deal and US Fed Rate Cut Buzz?

Auto stocks are once again in the spotlight as global and domestic factors align to boost investor interest. With the India-US trade deal discussions gaining momentum and expectations of a US Federal Reserve rate cut, analysts believe the auto sector could offer attractive opportunities.

Why Auto Stocks Are Gaining Traction

Despite global tariff uncertainty weighing on several sectors, auto companies remain relatively insulated due to their low export dependence. Instead, multiple domestic reforms are supporting growth.

In August, the government streamlined GST rates across two-wheelers, cars, tractors, trucks, buses, and auto components—aimed at lowering consumer prices, stimulating demand, creating jobs, and strengthening India’s position as a global auto hub.

“Auto companies are highly rate-sensitive. A US Fed rate cut could set the tone for an RBI rate cut, easing financing costs and boosting auto demand,” explained Anuj Gupta, Director, Ya Wealth Research & Advisory. He also pointed out that Donald Trump’s expected India visit by November 2025 could reduce tariff concerns, further aiding sector sentiment.

Top Auto Stock Picks

Gupta recommends investors track the following stocks for value opportunities:

• Eicher Motors
• Tata Motors
• TVS Motor
• Bajaj Auto
• JBM Auto
• Bosch
• Amara Raja
• Exide Industries
• UNO Minda

Meanwhile, Seema Srivastava, Senior Research Analyst at SMC Global Securities, highlighted Ashok Leyland as a particularly strong pick.

“Ashok Leyland is well-positioned to benefit from both a potential India-US trade deal and a US Fed rate cut. The company’s strong market leadership, diverse product portfolio, and robust financials make it a relatively safe investment for those open to short-term risks,” Srivastava said.

She further noted that the company’s expansion into EVs, entry into new markets, and comfortably valued stock strengthen its long-term investment case.

Outlook

With supportive government reforms, global policy tailwinds, and rising demand for automobiles, analysts suggest keeping a close watch on auto stocks. While short-term volatility cannot be ruled out, the sector remains a rate-sensitive and policy-driven play with strong growth potential.