Mumbai: February 6, 2025: Domestic automakers, including Tata Motors and Mahindra & Mahindra, have expressed their opposition to the reduction of import tariffs, contending that such a move would deter investment in local manufacturing and jeopardize the emerging electric vehicle industry.
The United States is urging India to abolish tariffs on automobile imports as part of a proposed trade agreement; however, India is hesitant to commit to an immediate reduction to zero, according to the same report. India’s auto tariffs, which can soar to 110%, are anticipated to be a pivotal topic in the upcoming trade discussions.
This situation is particularly crucial for Tesla, which is gearing up to enter the Indian market. Tesla’s CEO, Elon Musk, has previously voiced concerns regarding India’s steep tariffs, which have caused delays in the company’s expansion plans. Recently, U.S. President Donald Trump has echoed these sentiments, labeling India’s auto tariffs as “among the highest in the world” and cautioning against potential reciprocal measures, as reported by Reuters.
A source informed Reuters that the U.S. anticipates India will reduce tariffs to “zero or negligible” in most sectors, with agriculture possibly being an exception. Another source indicated that India is “listening to the U.S.” and has not outright rejected the request but will first engage with domestic industries before formulating a response.
Following a meeting between President Trump and Indian Prime Minister Narendra Modi last month, both nations have committed to resolving trade disputes and pursuing a phased trade agreement by fall 2025, aiming for $500 billion in bilateral trade by 2030. India’s Trade Minister Piyush Goyal is currently in the United States, where he has met with U.S. Commerce Secretary Howard Lutnick and is expected to confer with United States Trade Representative Jamieson Greer, according to the report.
