U.S. President Donald Trump said it would be ‘unfair’ to the U.S. if Elon Musk (in picture) did decide to build a factory in India. File
| Photo Credit: AP

U.S. President Donald Trump has said that if Tesla were to build a factory in India to circumvent that country’s tariffs, it would be “unfair” to the U.S., in an interview with Fox News which aired on Tuesday (February 18, 2025).

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Mr. Trump called out India’s high duty on cars during Prime Minister Narendra Modi’s visit to the U.S. last week but agreed to work towards an early trade deal and resolve their standoff over tariffs.

Tesla’s CEO Elon Musk has long criticised India for having import tariffs of around 100% on EVs which protect local automakers such as Tata Motors in the world’s third largest auto market, where EV adoption is still at a nascent stage.

Mr. Trump said it is “impossible” for Mr. Musk to sell a car in the South Asian nation.

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“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.

India’s government in March unveiled a new EV policy lowering import taxes substantially to 15% if a carmaker invests at least $500 million and sets up a factory.

Reuters reported on Tuesday that Tesla has selected locations for two showrooms in the Indian cities of New Delhi and Mumbai, and posted job ads for 13 mid-level roles in India. It does not currently manufacture any vehicles in India.

Mr. Trump said it would be “unfair” to the U.S. if Mr. Musk did decide to build a factory there.

“Now, if he built the factory in India, that’s okay, but that’s unfair to us. It’s very unfair,” Mr. Trump said in the interview.

Foreign Ministry did not immediately respond to a request for comment.

Mr. Trump’s plans for reciprocal tariffs on every country that taxes U.S. imports have raised the risk of a global trade war with American friends and foes.

File.
| Photo Credit: Reuters

U.S. electric carmaker Tesla is looking at potential showroom locations in New Delhi and Mumbai ahead of plans to begin sales in India later this year, two people familiar with the discussions said.

Tesla, which saw its global vehicle deliveries decline in the first quarter for the first time in nearly four years, is stepping up efforts to expand into new markets.

It wants to begin with a showroom of 3,000 to 5,000 square feet (280-465 square metres) as well as a service hub in each city, said one of the people familiar with the plans.

The automaker has begun production of right-hand drive cars at its plant in Germany for export to India, separate sources have said.

India last month cut electric vehicle import taxes to 15% from as much as 100% for automakers that invest at least $500 million and set up a factory.

Tesla Chief Executive Elon Musk is expected to make an investment announcement and meet Prime Minister Narendra Modi during a two-day visit to India from Sunday. Mr. Musk and Mr. Modi last met in New York in June.

Tesla executives started looking at locations last month and have held talks with several real estate developers as they look at potential high street and mall sites, one of the sources said. The person added that the company is keen to begin construction soon so that the showrooms can open in 2024.

The sources declined to be identified as discussions were confidential. Tesla did not immediately respond to a request for comment.

Tesla is grappling with slower growth for electric vehicles in both its main markets of the United States and China. Reuters reported this month that Tesla has cancelled a long-promised inexpensive car that investors have been counting on to drive mass market growth.

Demand for electric cars in India – the world’s third-largest auto market – is expected to rapidly climb. EVs made up just 2% of India’s total car sales in 2023, but the government has said it wants 30% of all new car sales to be electric from 2030.