India Leaning To Cut Tariffs On EVs To Appease Elon, Trump

Photo: tesla.com

India-West News Desk

NEW DELHI – India is set to reduce import tariffs on electric vehicles, overriding requests from domestic automakers to postpone such cuts for four years, as the government prioritizes securing a trade deal with the United States, according to Reuters.

Local car manufacturers have been lobbying Prime Minister Narendra Modi’s administration to delay tariff reductions until 2029 and then gradually bring them down to 30% from the current rate.

However, officials in New Delhi are determined to move ahead with tariff cuts as it has drawn criticism from President Donald Trump and Tesla CEO Elon Musk.

This move comes as India seeks to strengthen ties with Trump—who has previously labeled India a “tariff king”—even as he prepares to introduce reciprocal tariffs on trading partners later on April 2.

An immediate tariff reduction would benefit Tesla, which has finalized plans to open showrooms in Mumbai and New Delhi, aiming to launch its imported vehicles in India this year, noted Reuters. Trump has argued that Tesla currently faces an “impossible” situation selling in India and should not be required to set up a local factory.

However, the decision would be a blow to domestic automakers like Tata Motors and Mahindra & Mahindra, both of which have invested heavily in local EV production and have pushed back against the proposed duty cuts.

“We have protected the auto industry for far too long. We will have to open it up,” said a government official to Reuters, emphasizing that the reduction in tariffs—including for EVs—would be “significant.”