Elon Musk, who leads Tesla, and former U.S. President Donald Trump held an interesting dialogue about Tesla’s possible Indian market entrance. During their discussion, the main obstacles facing Tesla’s expansion were discussed, such as India’s steep import tariffs and its requirement for local manufacturing.
The negotiations between Tesla and India about vehicle entry to the South Asian market have continued for multiple years. The 100 percent import duty levied on foreign-made EVs by India has prevented Tesla from entering the Indian market because it raises the price of its vehicles. The Indian government proposed duty reductions and exemptions for Tesla, but the company must establish a local factory in India.
The requirement to manufacture within India matches Prime Minister Narendra Modi’s “Make in India” program that supports local manufacturing. The recent dialogues between Musk and Modi have resulted in Tesla employing sales and service advisors throughout India, but the import duty problem persists.
President Trump and Musk conducted an interview to discuss how Indian trade policies affect Tesla’s business operations. Trump emphasized that he believed Tesla should not be compelled to establish manufacturing facilities in India and proposed a system of equal trade tariffs as an alternative solution.
Musk emphasized that the import duties imposed by India reach 100 percent levels. Trump declared that this situation was unjust to American interests. I informed Prime Minister Modi during our meeting yesterday that I would apply the same fees he imposes.
The opposing views between the parties could affect the current negotiations. The CEO of Tesla views India as a vital market for expansion but Prime Minister Modi focuses on economic advantages for his nation and President Trump wants to support American manufacturing facilities. The final discussions will decide if Tesla manages to enter the Indian market or if they need to explore different business strategies.
