Donald Trump Criticizes Tesla’s Potential Factory in India

Days after Tesla CEO Elon Musk met with Indian Prime Minister Narendra Modi, former U.S. President Donald Trump expressed concerns over the electric vehicle manufacturer’s potential factory setup in India. Speaking in an interview with Fox News' Sean Hannity, Trump criticized existing tariff structures, describing them as "very unfair" to the United States.

During the discussion, Trump reiterated his long-standing stance on trade policies, arguing that multiple nations impose high tariffs on American goods while the U.S. maintains significantly lower import duties. He claimed that "every country in the world takes advantage of us, and they do it with tariffs," adding that high duties make it difficult for Tesla to sell cars in India. "I don’t know if that’s true or not, but I think—" he remarked, referring to India’s trade policies.

Trump and Musk Discuss India's Tariff Policies on Tesla

During the discussion, Elon Musk interjected to confirm that "the tariffs are like 100 per cent import duty," reinforcing concerns about India's trade policies. Trump echoed Musk's remarks, emphasizing that such high tariff rates create an uneven playing field for U.S. companies in global markets.

A White House fact sheet highlights that India imposes a 100 percent tariff on American motorcycles, while the U.S. levies only 2.4 percent on Indian motorcycles. Trump argued that while Tesla would benefit India by establishing a local manufacturing facility, the broader trade arrangement remained "very unfair" to the U.S.

Tesla's India Expansion Plans

Despite Trump's concerns, Tesla appears to be advancing its plans for expansion in India. The company has started hiring for retail and administrative positions in Mumbai, signaling renewed interest in the Indian market. Sources suggest Tesla's initial strategy involves importing electric vehicles (EVs) and selling them through showrooms in major cities such as Mumbai and Delhi.

Tesla has posted 13 job openings across its website and LinkedIn, including roles in store management, customer support, and delivery operations. This hiring push indicates a structured approach after previous attempts to enter the Indian market faced setbacks.

Policy Changes and Tariff Adjustments

India has long been on Tesla’s radar, and recent policy adjustments appear to have created a more favorable environment. The Indian government introduced an EV incentive scheme last year, reducing import duties to 15 percent for companies committing a minimum investment of $500 million and starting local production within three years. Under this scheme, eligible manufacturers can import up to 8,000 EVs annually at the reduced tariff rate.

Additionally, the latest Union Budget included a reduction in the import duty for EVs priced above $40,000 (approximately ₹35 lakh) from 100 percent to 70 percent. However, a newly introduced 40 percent Agriculture Infrastructure and Development Cess (AIDC) has partially offset this reduction, maintaining a significant tax burden on imports.

Future Prospects for Tesla in India

Musk has previously expressed interest in producing an affordable Tesla model in India, potentially priced between ₹25-30 lakh, with a focus on regional exports. The Indian government is reportedly optimistic about Tesla's potential entry, particularly following Apple's success in manufacturing and exporting iPhones from India. If Tesla proceeds with local production, it could mark a significant milestone in the country's EV landscape.

While Trump's remarks highlight broader concerns about trade disparities, Tesla's India expansion remains a developing story, with further updates expected in the coming months.

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