“I told Prime Minister Narendra Modi yesterday… India charges the highest tariffs in the world,” said former U.S. President Donald Trump.
Former U.S. President Donald Trump recently expressed his concerns about Elon Musk’s plan to set up a Tesla factory in India. According to Trump, it would be unfair for the United States if Musk were to manufacture cars in India while facing high import tariffs when selling them in the U.S.
Trump Criticizes High Import Tariffs in India
Trump raised this issue while speaking with Fox News in an interview, where Elon Musk was also present. He pointed out that India imposes some of the highest import tariffs in the world, making it extremely difficult for companies like Tesla to sell their vehicles in the country without setting up local manufacturing.
He explained that cars imported into India are charged a 100 percent tariff. This means that a car that costs $40,000 in the U.S. would end up costing around $80,000 in India, making it nearly impossible to compete in the Indian market unless a factory is established there.
However, Trump believes that if Musk sets up a Tesla factory in India, it would be unfair to the U.S. economy. He stated, “If he built the factory in India, that’s okay, but that’s unfair to us. It’s very unfair.”
Trump’s Stand on Reciprocal Tariffs
During the interview, Trump also spoke about his policy on reciprocal tariffs. He explained that he plans to introduce a system where the U.S. will charge the same amount of tariffs on imports from other countries as they charge on American goods.
“I was doing it [during my first term]. I charged China tariffs. I took in hundreds of billions of dollars. We had the greatest economy in history. But then we got hit with COVID, and we had to solve that problem… I want to come back and do the reciprocal tariffs because we have a deficit with almost every country in the world,” he said.
According to Trump, the U.S. has a trade deficit with many countries, including India. He believes that by imposing reciprocal tariffs, the U.S. will be able to reduce this deficit and strengthen its economy.
India’s Trade Policies and Tesla’s Plans
India has long been known for its high import duties on automobiles. The Indian government has argued that these tariffs help protect local car manufacturers and encourage companies to set up factories within the country rather than relying on imports.
Elon Musk has been in talks with the Indian government for several years regarding Tesla’s entry into the Indian market. While Tesla has expressed interest in selling electric vehicles in India, the high tariffs have been a major roadblock.
To address this issue, Musk has been considering setting up a manufacturing plant in India. In 2023, he met with Prime Minister Narendra Modi, where they discussed Tesla’s potential investment in the country. Since then, Tesla has been exploring different locations for a factory, with states like Maharashtra, Tamil Nadu, and Gujarat emerging as potential options.
Setting up a Tesla factory in India could help the company avoid high import tariffs and make its vehicles more affordable for Indian consumers. It would also align with the Indian government’s push for electric vehicles and sustainability.
How Would a Tesla Factory in India Affect the U.S.?
Trump’s concern is that if Tesla manufactures cars in India, it could result in job losses in the U.S. If American companies start setting up factories in other countries, it might reduce manufacturing and investment in the U.S. economy.
However, many experts argue that global businesses operate in multiple markets, and setting up a factory in India would not necessarily harm Tesla’s operations in the U.S. Instead, it could help Tesla expand its global reach and become more competitive in the international market.
Some analysts believe that Tesla’s move to India could be similar to its factories in China and Germany, where production is mainly meant to serve local markets rather than replacing U.S. operations.
Musk’s Response to the Concerns
Elon Musk has not directly responded to Trump’s comments about Tesla’s India plans. However, he has repeatedly stated that Tesla aims to expand globally and reach new markets.
Musk has often emphasized that Tesla’s goal is to accelerate the adoption of electric vehicles worldwide. Expanding into India could be a strategic move, as India is one of the largest automobile markets in the world and has been actively promoting clean energy solutions.
Additionally, Tesla has already built factories outside the U.S., such as its Gigafactories in China and Germany, to cater to different markets efficiently. Establishing a similar facility in India would be a continuation of this strategy rather than a shift away from the U.S.
The Bigger Picture: U.S.-India Trade Relations
Trump’s comments also reflect broader trade tensions between the U.S. and India. Over the years, the U.S. has raised concerns about India’s trade policies, including high tariffs on various goods.
India, on the other hand, has defended its policies, stating that they are necessary to protect local industries and create jobs within the country. The Indian government has also taken steps to attract foreign investment, including offering incentives for companies to set up manufacturing plants in India.
While Tesla’s potential factory in India is a key topic of discussion, it is also part of a larger debate on global trade policies, economic strategies, and the balance between protecting domestic industries and encouraging international investment.
