U.S. President Donald Trump criticized Tesla’s potential plans to build a factory in India, calling it “very unfair” as the company seeks to enter the Indian market amidst high tariffs. During a Fox News interview, Trump noted that India’s 100% import duty on EVs hinders U.S. sales and protects local manufacturers like Tata Motors. Despite discussions of an early trade deal with Prime Minister Modi to address tariffs, Tesla has started hiring staff in India and plans to open showrooms in New Delhi and Mumbai, while lobbying for lower import duties and policy incentives.
Washington DC:
A few days after Tesla began recruiting employees in India, indicating its possible entry into the market, US President Donald Trump remarked that any plans the EV manufacturer may have to establish a factory in India, in order to bypass the country’s tariffs, would be ‘very unfair’. The US President shared these thoughts during a joint interview with Tesla CEO Elon Musk on Fox News’ Sean Hannity.
President Trump recalled addressing India’s steep car duties during Prime Minister Narendra Modi’s visit to the United States the previous week but expressed his willingness to work towards an early trade agreement and to settle their tariff disputes.
During his visit to the US, PM Modi also met with Tesla CEO Elon Musk, who has consistently criticized India for imposing import tariffs around 100 percent on EVs, a measure that supports local car manufacturers such as Tata Motors in the world’s third-largest automotive market, where the adoption of EVs is still in its infancy.
Mr. Trump stated that it is “impossible” for Elon Musk to sell cars in India. “Every country in the world takes advantage of us, and they do it with tariffs… It is nearly impossible to sell a car, for example, in India,” he commented.
However, in March, the Indian government introduced its new EV policy, significantly reducing import duties to 15 percent if a carmaker commits at least $500 million to setting up a factory.
President Trump highlighted that it would be “unfair” to the US if Elon Musk chose to build a factory there. “If he were to build the factory in India, that’s fine, but it’s unfair to us. It’s very unfair,” Trump said during the interview.
India’s foreign ministry has not yet responded to a request for comment.
Trump’s Reciprocal Tariff Threat
Donald Trump’s intentions regarding reciprocal tariffs on every country that taxes US imports have heightened the chances of a global trade conflict with both allies and adversaries. Under his suggested reciprocal tariff framework, the US would apply the same tariff rates on imports from other countries as those countries impose on American products.
“If I said 25 percent, they would scream, ‘Oh, that’s terrible.’ I don’t say that anymore… because I state, ‘Whatever they charge, we’ll charge.’ And you know what? They back off,” Mr. Trump explained to Fox News on Tuesday while discussing his tariff strategies.
Tesla’s India Entry
Elon Musk’s Tesla is projected to enter the Indian market as soon as April this year, according to sources. The EV maker has allegedly chosen locations for two showrooms in the Indian cities of New Delhi and Mumbai and has posted job openings for 13 mid-level positions in India.
As of now, Tesla does not manufacture any vehicles within India.
Tesla has long been rumored to be looking into entering India’s electric vehicle (EV) market but has encountered several challenges regarding localized factory investments, regulations, and high taxation. The company has previously pushed for policy incentives and reduced import duties.