Donald Trump has voiced concerns over Tesla's potential plans to establish a manufacturing facility in India, calling it "very unfair." The statement came during a conversation between Trump and Tesla CEO Elon Musk in an interview with American TV host Sean Hannity. This discussion follows Musk’s recent meeting with Indian Prime Minister Narendra Modi during Modi’s visit to the U.S.
Since assuming office for the second time in January, Trump has been making a common assertion that global trade practices disadvantage the U.S. by tariffs. Talking to Hannity, he said, ".every country in the world takes advantage of us, and they do it with tariffs. They makes — make it — it's impossible for him to sell a car, practically, in, as an example, India.". I don't know if that is or not, but I think —"
Musk interrupted him, explaining, "The tariffs are like 100% import duty." Trump agreed, saying they were "so high."
According to a White House fact sheet, India charges a 100% tariff on U.S.-imported motorcycles, while American tariffs on Indian motorcycles are only 2.4%.
Disapprovingly, Trump said, "Now, if he built the factory in India, that's okay, but that's unfair to us. It's very unfair."
The New York Times captured the Trump-Musk relationship as possibly one of the most impactful collaborations in today's U.S. government. "It's a fascinating alliance between two volatile men who publicly insulted one another — and who really only got to know each other perhaps six months ago. And it's one that could define the future of the nation," the report continued.
Remembering a discussion with Musk, Trump said during the interview, "You know they're trying to drive us apart."
White House Interview Transcript
THE PRESIDENT: And — but all the nations of the world take advantage of us, and they do it with tariffs. They makes — make it — it's impossible for him to sell a car, practically, in, as an example, India. I don't know if that's true or not, but I think —
MR. MUSK: The tariffs are like 100 percent import duty.
THE PRESIDENT: The tariffs are so high —
MR. MUSK: Sure.
THE PRESIDENT: — they don't wish to — now, if he had opened the factory in India, fine, but that's not right to us. That's exceedingly unfair.
And I said, "You know what we do?" I told Prime Minister Modi yesterday — he was here. I said, "Here's what you do. We're going to do — be very fair with you." They have the highest tariffs in the world, just about.
Q: 36 percent?
THE PRESIDENT: Oh, much — much higher.
MR. MUSK: It's 100 percent on — auto imports are 100 percent.
THE PRESIDENT: Yeah, that's peanuts. So, much higher. And — and others too. I said, "Here's what we're going to do: reciprocal. Whatever you charge, I'm charging." He goes, "No, no, I don't like that." "No, no, whatever you charge, I'm going to charge." I'm doing that with every country.
This conversation points to Trump's insistence on tougher tariff policies.
Tesla's Growing Interest in India
Shortly after Modi’s U.S. visit, Tesla has signaled a renewed interest in India by initiating hiring efforts in the country. The move suggests Tesla is actively exploring opportunities to expand its presence in the Indian market.
Even though Tesla has had limited interaction with India until now, it is now hiring for 13 positions in the country, ranging from customer service to operations. The recruitment drive has again fueled rumors about Tesla finally launching in India, an endeavor previously derailed by differences over tax incentives and production commitments.
Musk has been slamming India's high import taxes for years, pointing to them as a major impediment to Tesla's growth in the country.
Tesla's Move Amid Trade Tensions
With Tesla inexplicably accelerating recruitment in India, one wonders if the company is getting the favorable tax terms it has been seeking for so long. Tesla's precise strategy on manufacturing or assembling in India is unclear. Nonetheless, with Musk's relationship with Trump and increasing trade tension, the timing of this expansion move is being highlighted.
Musk, who is now a central figure in Trump's inner circle, has considerable clout in policy circles. With Trump having won another term in office, the administration will probably take an even more aggressive trade position. Although Tesla had earlier dithered on India plans, changing political currents may force New Delhi to make more favorable investment terms.
Historically, Tesla has advocated for lower import duties prior to investing in large-scale operations in India. The Indian government has already implemented a policy granting lower import taxes on electric vehicles to firms that invest at least ₹41.5 billion ($500 million) in domestic manufacturing within three years. Nevertheless, the Indian EV market has expanded substantially, boosting competition for Tesla.
During Modi’s recent meeting with Trump, the Indian Prime Minister made trade concessions on Harley-Davidson motorcycles, but Trump countered with tariff threats.
India’s Booming EV Industry
India’s electric vehicle sector is rapidly expanding, with domestic automakers ramping up production. Companies like Tata Motors, Mahindra & Mahindra, and Maruti Suzuki are making substantial inroads into the EV space.
Maruti Suzuki, which took a while to adopt EVs, launched the e-Vitara at a car show in February. Foreign competition, like Vietnam's VinFast, is also making its debut with fresh products.
Tesla's move to recruit in India comes as domestic producers have established a strong presence. A Tesla foray could heighten competition, pitting Indian companies that have heavily invested in the EV space.
Tata Motors is presently the market leader in Indian EVs with popular models such as Nexon EV and Tigor EV. With the support of a strong manufacturing setup and R&D strength, the company has attained a significant share of the business. On the other hand, Mahindra & Mahindra, with its rugged utility vehicles, ventured into EVs with models such as eVerito and e2oPlus.
MG Motor India, the other major player, has achieved impressive success with the MG ZS EV, aiming at tech-conscious consumers. Indian firms have resisted tariff cuts for Tesla all along, maintaining that concessions on tariffs would be to the detriment of local companies that have invested decades in domestic manufacturing.
Conclusion
As Tesla makes tangible moves towards entering the Indian market, its recruitment efforts raise larger questions about trade policy and the international EV market. As Tesla's growth may stimulate India's EV sector, it also poses the threat of heightened competition for domestic automakers. With Trump advocating for tit-for-tat tariffs and Musk's increasing influence within the U.S. administration, business dynamics between Tesla and India continue to be multifaceted.
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