(Image source from: REUTERS)
Following Tesla's announcement of staff recruitment in India, hinting at a potential market entry, US President Donald Trump criticized any intentions from the electric vehicle manufacturer to establish a factory there in order to avoid local tariffs, labeling such actions as “very unfair.” These comments were made during a joint discussion with Tesla's CEO Elon Musk on Fox News with Sean Hannity. President Trump recalled addressing India's substantial car tariffs during Prime Minister Narendra Modi's recent visit to the United States, while also expressing a willingness to negotiate a timely trade agreement to address their tariff-related disputes. During this visit, PM Modi met with Musk, who has often condemned India’s import duties nearly 100 percent on electric vehicles, which safeguard domestic producers like Tata Motors in a country where electric vehicle adoption is still emerging. Trump remarked that selling cars in India is “impossible,” stating, “Every nation capitalizes on us with tariffs... Selling a car in India is practically unattainable.”
Nevertheless, the Indian government introduced a new electric vehicle policy in March, significantly cutting import taxes to 15 percent if a car manufacturer commits at least $500 million in investments and establishes a factory. Trump commented that if Musk chose to open a factory in India, it would represent an “unfair” scenario for the United States: “If he builds the factory in India, that’s fine, but it’s unfair to us. It’s very unfair,” he asserted in the interview. The Indian foreign ministry did not provide an immediate response to inquiries. Trump's intentions to introduce reciprocal tariffs on all nations that impose taxes on US imports pose the threat of a worldwide trade conflict involving both allies and adversaries. His outlined reciprocal tariff strategy would see the US applying the same tariff rates on imports as other countries do on American products. He explained, “If I were to say 25 percent, they’d react with, ‘Oh, that’s awful.’ I no longer put a figure on it... because I state, ‘Whatever they charge, we’ll impose the same.’ And you know what? They stop.”
Sources indicate that Tesla is likely to make its debut in the Indian market as soon as April this year. The company has reportedly identified sites for two showrooms in New Delhi and Mumbai and has advertised for 13 mid-level positions in India. However, Tesla has yet to produce any vehicles within the country. The company has been rumored to be planning a move into India's electric vehicle sector for some time but has encountered various challenges related to local factory investments, regulatory environment, and steep taxes. Tesla has also previously advocated for policy benefits and reduced import duties.
