In a recent interview on Fox News with Sean Hannity, President Donald Trump claimed that Tesla CEO Elon Musk faced challenges in selling cars in India due to high import tariffs. Trump suggested that if Musk were to establish a manufacturing plant in India, it would be unfair to the United States. Trump criticised India for imposing some of the highest tariffs in the world and warned that the US would respond by imposing tariffs of equal measure on Indian goods.
Trump claimed that the United States has been taken advantage of by foreign nations, with a particular focus on India, citing their imposition of high tariffs.
Trump said, “Every country in the world takes advantage of us, and they do it with tariffs. They make it practically impossible for him [Musk] to sell a car, as an example, in India.”
Trump said if Musk wants to set up a facility in India, that would be Okay but it’s unfair to America, very Unfair.”
High tariffs
During a meeting in Washington DC, Musk verified that India imposes tariffs as high as 100% on automobiles. Trump stated that he informed Prime Minister Narendra Modi during their meeting that he would mirror India's tariffs on the US. He mentioned that this approach would be applied to all countries.
Trump's disapproval of the potential Tesla plant in India coincided with Modi's discussion with the billionaire in Washington DC during a two-day visit.
The comments arise amidst ongoing discussions surrounding international trade policies, underscoring the challenges involved in Tesla's potential expansion in India. Despite Tesla's interest in the Indian market for some time now, the combination of steep import tariffs and an emerging domestic electric vehicle industry has thus far prevented any concrete steps towards local manufacturing.
As debates on trade equity persist between the US and India, the implications of President Trump's tariff warnings and the possibility of retaliatory actions could have significant impacts on bilateral economic ties.
Tesla in India
Earlier in the day, sources informed Business Today of Tesla officials planning to visit India in April for a comprehensive assessment of the company's operations and to engage with key government departments, such as the Prime Minister’s Office (PMO), the Ministry of Heavy Industries, and the Ministry of Road Transport and Highways (MoRTH).
Tesla has identified Maharashtra's Chakan and Sambhaji Nagar, as well as Gujarat, as the top choices for its manufacturing hub. The company is projected to make an initial investment of $3-5 billion to establish its production facilities, according to the source.