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Days after Tesla started hiring staff in India, signalling its potential entry into the market, US President Donald Trump has said that any potential plans of the EV maker to build a factory in India, to circumvent that country's tariffs, would be 'very unfair'. The US President made the remarks during a joint interview with Tesla CEO Elon Musk for Fox News' Sean Hannity.
President Trump recalled that he called out India's high duty on cars during Prime Minister Narendra Modi's visit to the United States last week, but agreed to work towards an early trade deal and resolve their standoff over tariffs.
During his US visit, PM Modi also met Tesla CEO Elon Musk, who has long criticised India for having import tariffs of around 100 per cent 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 Elon Musk to sell a car in India. "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.
However, the Indian government in March unveiled its new EV policy, lowering import taxes substantially to 15 per cent if a carmaker invests at least $500 million and sets up a factory.
President Trump said it would be "unfair" to America if Elon 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," Trump said in the interview.
India's foreign ministry did not immediately respond to a request for comment.
Trump's Reciprocal Tariff Threat
Donald Trump's plans for reciprocal tariffs on every country that taxes US imports have raised the risk of a global trade war with American friends and foes. Under his proposed reciprocal tariff system, the US would impose the same level of tariffs on imports from other countries as those nations levies on American goods.
"If I said 25 per cent, they'd say, 'Oh, that's terrible.' I don't say that anymore... because I say, 'Whatever they charge, we'll charge.' And you know what? They stop," Mr Trump told Fox News on Tuesday while talking about his tariff plans.
Tesla's India Entry
Elon Musk's Tesla is expected to enter the Indian market as early as April this year, according to sources. The EV maker has reportedly 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.
However, Tesla does not currently manufacture any vehicles in India.
Tesla has long been rumoured to foray into India's electric vehicle (EV) market but has faced several hurdles related to localised factory investments, regulations, and high taxes. It has previously lobbied for policy incentives as well as lower import duties.