India-UK, US-UK FTAs set to lift JLR prospects as Tata Motors focuses on cost discipline

The India-UK and US-UK free trade agreements are expected to improve the prospects of Jaguar Land Rover, according to a senior company official. P B Balaji, Group CFO of Tata Motors, stated that the FTAs will help drive growth for JLR. "We welcome the India-UK FTA as well as the US-UK tariff change. We are waiting for more details in terms of timing. We also need clarification on parts and accessories, but overall, it's heading in the right direction. The situation is much better than before, but we will wait for further clarification on notifications and any applicable changes before making a final decision," Balaji said during an earnings call.

Balaji mentioned that the company's current JLR lineup will not be affected by the FTAs.

“The current cars that are already there in India, i.e. the Range Rover franchise, are already being manufactured in India on a CKD basis and won't be impacted by this FTA. At the same time, we also wait for when the FTA actually comes into force. But we believe this is going to benefit the future costs that are going to come, which means customers will be able to access these global cars at global prices much faster because of this FTA, and therefore, it augurs very well for continuing to drive JLR performance in India going forward. So that's the play on both of the treaties,” noted Balaji. 

Under the India-UK FTA, import duties on cars built in the UK have been reduced from 100% to 10%. Similarly, under the US-UK FTA, the US government has lowered tariffs on cars imported from the UK from 25% to 10%. Last month, in response to a 25% tariff announcement by the Trump administration on auto imports, JLR stopped shipping cars to the US.

Despite this reduction, the 10% tariff is still higher than the previous 2.5% tariff. Balaji mentioned that the company is developing a plan to control costs. He stated: “The 10% tariff is still higher than 2.5%, which is the reason we are continuing to put through a plan on cost out, cash out, in, in the overall JLR space. There are multiple areas for us to work on, including material cost, warranty costs, etc. That’s why we maintain a heightened vigilance of cost and cash as we navigate that piece. And we'll probably be able to see the implications of all those in the coming quarters.” 

In the fourth quarter of fiscal year 2025, Tata Motors reported a 51.7% decrease in net profit for the quarter ending in March 2025, with earnings falling to ₹8,470 crore compared to ₹17,552 crore in the previous year. Revenue experienced a slight increase, rising to ₹1,18,927 crore from ₹1,18,300 crore year-on-year.