Elon Musk-led electric vehicle maker Tesla is ramping up preparations for its long-delayed entry into India — a move that apparently hasn’t gone down well with US president Donald Trump.
Indian media outlets were beaming with updates about the EV-maker’s entry into the country, with one leading English publication citing government sources to report that Tesla will invest between $3 billion and $5 billion to build a manufacturing hub in India.
Another outlet reported that Tesla will import vehicles from Berlin to sell in India, with a starting price of around 21 lakh rupees ($24,260).
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That was after Reuters reported on Tuesday that Tesla had selected locations for two showrooms in the Indian cities of New Delhi and Mumbai and also posted job ads for 13 mid-level roles in India.
Tesla’s sudden overdrive on entering the Indian market follows Indian Prime Minister Narendra Modi’s meeting with its CEO Elon Musk in the United States last week. They discussed issues including space, mobility, technology and innovation, Modi said on X.
Meanwhile, Modi was actually in Washington to meet with US President Donald Trump and begin dialogue on an early trade deal to prevent high ‘reciprocal’ tariffs on India. As part of their talks, New Delhi is likely to lower tariffs on some US imports, including EVs.
The talks gave Tesla the opening it needed to finally enter India — Musk has long criticised the country for having import tariffs of around 100% on EVs which protect local automakers such as Tata Motors in a nascent EV market.
But Musk’s Tesla may now run-in to a different problem: Trump.
‘Not fair to US’
Speaking with Fox News on Tuesday, hours after the Reuters report, Trump said it would be “unfair” to the US if Tesla were to build a factory in India to circumvent New Delhi’s tariffs.
Trump said it is “impossible” for Musk to sell a car in the South Asian nation.
“Every country in the world takes advantage of us, and they do it with tariffs… It is impossible to sell a car, practically, in, as an example, India,” he said.
“Now, if he built the factory in India, that’s okay, but that’s unfair to us. It’s very unfair,” Trump said in the interview.
Trump has called out India’s high tariffs several time in the past. His most recent criticism came during Modi’s visit when he called the duties “unfair” and “very strong”.
“And really it’s a big problem I must say,” Trump said.
That same day, railing against the climate for US businesses in India, Trump unveiled a roadmap for reciprocal tariffs.
“We are being reciprocal with India,” Trump told a news conference. “Whatever India charges, we charge them.”
India imposes the highest tariffs on US exports of any major American trading partner. In March, the Modi government unveiled a new EV policy lowering import taxes substantially to 15% if a carmaker invests at least $500 million and sets up a factory.
Indian and US officials say a trade deal between the countries could be reached within the year.
- Reuters, with additional editing and inputs from Vishakha Saxena
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