Tata Motors studies US trade route for JLR exports from India under Indo-US deal

Land Rover models

• Tata Motors to soon open Chennai plant
• Chennai plant to start with JLR models
• JLR also has plant in Pune

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Tata Motors has hinted at evaluating the possibility of exporting Jaguar Land Rover (JLR) vehicles from India to the United States, leveraging provisions under the recently announced Indo-US trade deal, as the company looks to optimise global manufacturing and manage tariff risks amid uncertain demand conditions.

The country’s largest automaker, which owns the British luxury car brands Jaguar and Land Rover, is in the process of setting up a new JLR assembly facility near Chennai, Tamil Nadu. The plant is expected to begin operations in the coming weeks, although the company has not yet finalised the specific JLR models that will be assembled there. This will be JLR’s second assembly operation in India after its existing facility in Pune.

Responding to a query from Moneycontrol following Tata Motors’ Q3FY26 earnings announcement, Dhiman Gupta, Chief Financial Officer of Tata Motors Passenger Vehicles, said the company is still working through the details of the trade arrangement.

“Some of the details are being worked through. The phase-out of the tariff is not immediate but over a period of time. So, which models go in there and how the ramp-up is going to be, we need to work out the details in some time,” Gupta said.

Under the US-UK trade deal announced in 2025, up to 100,000 cars can be imported into the US at a concessional tariff of 10 percent, while shipments beyond that threshold attract a significantly higher tariff of 27.5 percent.

The upcoming Chennai plant will have an initial annual capacity of 250,000 units. While it will initially focus on assembling Land Rover models, the facility is expected to progressively accommodate Tata Motors’ own passenger vehicle portfolio in later phases.

JLR’s global manufacturing footprint is currently under strain. “Our Solihull (UK) and Nitra (Slovakia) plants are producing at full capacity. Demand globally is not particularly strong presently. China has some issues and the US, there is continued uncertainty.

“The cost to acquire customers on a global basis is rising,” said Richard Molyneux, Chief Financial Officer of JLR. “It is good news that India has FTAs with the regions where we produce our cars.”

India has already signed free trade agreements with the UK and the European Union, further strengthening its position as a strategic manufacturing hub for global exports.

JLR’s financial performance in the third quarter of FY26 reflected ongoing operational challenges. Wholesale volumes fell sharply by 43 percent year-on-year to 59,100 units, while retail sales declined 25 percent to 79,800 units. The company said volumes were impacted by a cyber incident that led to a loss of around 50,000 units.

Production levels only returned to normal by mid-November. In addition, volumes and profitability were affected by the planned wind-down of legacy Jaguar models ahead of the brand’s relaunch, as well as a deterioration in market conditions in China.

“Our plants are at normal production levels. We expect our volumes to improve significantly in the fourth quarter,” Molyneux said.

As Tata Motors studies the feasibility of using India as an export base for the US market, the move could mark a strategic shift for JLR, positioning India as a key node in its global supply chain amid trade realignments and capacity constraints elsewhere.