Indian Auto Stocks Surge on Modi’s Tax Cuts, Outpacing Asian Peers

Indian auto stocks are delivering their strongest performance against Asian peers in over a year, fueled by Prime Minister Narendra Modi’s tax cuts aimed at boosting consumer demand. The Nifty Auto Index has climbed 8.5% this month, dwarfing the 1% gain in the Bloomberg Intelligence Asia Auto Index and the Nifty 50’s 2.6% rise.

Goldman Sachs, Jefferies, and Morgan Stanley have upgraded recommendations for select automakers, anticipating a multi-year growth cycle. "We’re at the beginning of a new auto cycle that typically lasts 24 to 36 months," said Jimeet Modi of Samco Group, noting that tangible results will further accelerate momentum.

The government slashed goods and services taxes on passenger vehicles from 31% to 18%, timed with India’s festival season. Maruti Suzuki, the nation’s top carmaker, has soared 25% since the August 15 policy announcement, now rivaling General Motors and Mercedes-Benz in market valuation at $57 billion.