American automotive electric vehicle company Tesla will enter the Indian market soon. The company is to open its two showrooms in Mumbai and Delhi. Regarding this, the United States wants India to reduce the tariff on car imports as a part of a potential trade agreement between the two countries. However, India disagrees with eliminating tariffs immediately and is open to considering a reduction in future.
Currently, the tariff on imported cars in India is 110%, which Tesla CEO Elon Musk has criticised as one of the highest in the world. Due to the high tariff, Tesla previously cancelled entry into India, the world’s third-largest car market.
Elon Musk received support from U.S. President Donald Trump regarding this matter. Addressing Congress, Donald stated he would retaliate against the country’s trade policy.
“The US ask is for India to bring tariffs down to zero or negligible in most sectors, except agriculture,” a source told Reuters. The source added that the expectation of New Delhi eliminating auto tariffs was “clearer than any other”.
However, in a recent meeting between President Donald Trump and Prime Minister Narendra Modi, they agreed to address tariff disputes and begin working on a trade deal, with the ultimate goal of achieving a bilateral trade of $500 billion by 2030.
