Trump Calls Tesla India Expansion ‘Very Unfair’

Trump Calls Tesla India Expansion ‘Very Unfair’

Washington DC: Days after Tesla began hiring staff in India, US President Donald Trump expressed discontent over the possibility of the electric vehicle (EV) giant setting up a manufacturing facility in the country. Labeling the move as “very unfair” to the United States, Trump argued that such a decision would be a disadvantage to American businesses, especially in light of India’s historically high tariffs on imported vehicles.

Trump made these remarks during a joint interview with Tesla CEO Elon Musk on Fox News, where he reiterated his stance on global trade policies and the disparity in tariffs between the US and other nations.

During the discussion, Trump recalled his conversation with Indian Prime Minister Narendra Modi during his recent US visit. While the two leaders agreed to work towards an early trade deal, Trump highlighted his long-standing concerns over India’s high import duties on foreign automobiles, which he believes create an uneven playing field for American manufacturers.

India’s Tariff Policy and Tesla’s Interest

Historically, India has imposed import duties as high as 100% on EVs, a measure aimed at protecting domestic automakers such as Tata Motors. However, in March 2025, the Indian government introduced a revised EV policy, significantly reducing import duties to 15% for carmakers that invest a minimum of $500 million and establish local manufacturing facilities.

Trump, however, remains unconvinced. Referring to the policy change, he stated, “Now, if he [Elon Musk] built the factory in India, that’s okay, but that’s unfair to us. It’s very unfair.”

Reciprocal Tariff Plans and the Risk of Trade Wars

Trump has long been vocal about reciprocal tariffs, proposing a system where the US would impose the same tariffs on imports that other countries levy on American goods. His protectionist stance has raised concerns over a potential global trade war, as he aims to retaliate against nations that tax US imports at higher rates.

“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,” Trump said during the Fox News interview.

He further elaborated that under his reciprocal tariff policy, the US would mirror the tariffs imposed by other nations, aiming to level the playing field for American businesses. “If I said 25 percent, 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,” Trump asserted.

Tesla’s Expansion in India

Despite the controversy, Tesla is poised to enter the Indian market by April 2025, according to sources. The company has reportedly secured locations for two flagship showrooms in New Delhi and Mumbai, and posted job listings for over a dozen mid-level positions in India.

However, Tesla currently does not manufacture vehicles in India, and its potential entry into local production remains uncertain.

Tesla’s history with India has been marked by regulatory hurdles, as the company has previously lobbied for lower import duties and policy incentives to facilitate its expansion. Musk has repeatedly emphasized the need for reduced tariffs before committing to setting up a local gigafactory in India.

What Lies Ahead?

While Tesla’s India plans align with the country’s push for EV adoption, the political and economic implications of the move continue to spark debate. Trump’s protectionist stance and potential tariff retaliation could complicate Tesla’s global strategy, forcing Musk to navigate geopolitical tensions as he expands into new markets.

The Indian government has yet to respond to Trump’s latest remarks, but the developments could shape the future of US-India trade relations, particularly in the automobile and technology sectors.