Tesla’s India entry and U.S.-India trade relations in focus.

The United States is urging India to eliminate tariffs on imported cars as part of an upcoming trade agreement, but India remains hesitant to bring duties down to zero immediately, according to reports from Reuters. However, India is open to gradual reductions in tariffs, which currently reach as high as 110%.

The high auto tariffs are expected to be a key topic in upcoming trade negotiations, with U.S. carmakers—including Tesla—standing to benefit. Elon Musk has previously called India’s tariffs among the highest in the world and had delayed Tesla’s India entry due to these trade barriers. However, Tesla has recently renewed its push into the Indian market.

President Donald Trump has backed Musk’s stance, criticising India’s steep import duties in an address to Congress. Trump also warned of potential reciprocal measures if tariffs are not lowered.

While India is engaging in discussions, it has yet to commit to immediate tariff reductions. The Indian government is consulting with domestic automakers, including Tata Motors and Mahindra & Mahindra, who fear that lower import duties could hurt local EV production and investments.

Despite differences over tariffs, bilateral trade relations remain strong. The U.S. and India are working toward a trade target of $500 billion by 2030, with a formal agreement expected by fall 2025. Indian Trade Minister Piyush Goyal is currently in the U.S., meeting with key officials to navigate trade challenges.

While the government is unlikely to remove duties immediately, a phased reduction in tariffs seems possible as India balances global trade commitments with domestic industry interests.

Source: India Today