India is poised to lower import tariffs on electric vehicles, disregarding appeals from local automakers for a four-year delay in these reductions, as the government aims to secure a trade agreement with the United States. Domestic car manufacturers have been urging Prime Minister Narendra Modi’s government to postpone tariff cuts until 2029, followed by a gradual decrease to 30% from the existing rate. Nevertheless, officials in New Delhi are resolute in their decision to proceed with the tariff reductions, which have faced criticism from President Donald Trump and Tesla’s CEO Elon Musk. This initiative aligns with India’s objective to enhance its relationship with Trump, who has previously referred to India as a “tariff king,” even as he prepares to implement reciprocal tariffs on trading partners on April 2. An immediate reduction in tariffs would favor Tesla, which has completed plans to establish showrooms in Mumbai and New Delhi, with intentions to introduce its imported vehicles in India this year. Trump has contended that Tesla is currently in an “impossible” position in the Indian market and should not be mandated to establish a local manufacturing facility. However, this decision poses a challenge for domestic manufacturers such as Tata Motors and Mahindra & Mahindra, both of which have made substantial investments in local electric vehicle production and have opposed the proposed duty reductions. A government official stated to Reuters, “We have protected the auto industry for far too long. We will have to open it up,” highlighting that the tariff reductions, including those for electric vehicles, would be “significant.”
