Tesla's Growth and Trade Negotiations
Elon Musk-headed Tesla is looking to enter India, a country where its policy decisions could get affected. There are ongoing negotiations between India and the US regarding a trade pact to remove import tariffs on cars from America. But India is moving slowly to eliminate these import tariffs immediately.
Key Discussions on Trade Deal
Senior-level talks between US and Indian officials are imminent, and auto tariffs feature prominently among the issues to be discussed. It is reported that this trade agreement could lay the groundwork for the easy penetration of Tesla in India.
India's High Tariffs on Imports of Cars
India currently has a 110% tariff on vehicles imported from outside the country. Elon Musk has been in constant criticism of the policy, which he terms the highest auto tariffs in the world. He is still close to ex-President Donald Trump, who has also criticized India's tariff policy. Recently, in his address to Congress, Trump even issued the threat of retaliatory tariffs on Indian goods. US sources are urging the cancellation of tariffs across various sectors, with the automotive sector being the priority.
India's Cautious Approach
Even with US pressure, India is moving cautiously on the issue. The government intends to hold consultations with domestic industries before making any decisions on modifying its import policies. Tariffs and a possible free trade agreement were also among the issues discussed in recent talks between former President Trump and Prime Minister Narendra Modi. The objective of these talks is to raise bilateral trade to $500 billion.
Commerce Minister's US Visit
At present, India's Commerce Minister Piyush Goyal is on a one-week visit to the US, during which he has already met US Commerce Secretary Howard Lutnick. He will also be meeting with Trade Representative Greer.
India's Auto Market and Recent Policy Changes
India exports around 4 million vehicles each year, ranking it among the world's most sheltered car markets. Yet, the government recently lowered tariffs on 30 premium items, including high-end motorcycles, showing signs of adopting a more liberal trade policy.
