A rare public disagreement has emerged between former U.S. President Donald Trump and tech billionaire Elon Musk over Tesla’s plans to expand its footprint in India. The dispute centers around India’s high import tariffs on electric vehicles (EVs) and whether Tesla should establish a manufacturing plant in the country under the current trade policies.
The controversy surfaced after Trump, currently in the midst of a political resurgence in the U.S., criticized India’s stringent tariff structure, calling it unfair to American manufacturers. Speaking at a business forum in Florida earlier this week, Trump said, “India has some of the highest tariffs in the world on American goods. If Tesla is going to build a factory there, it needs to be on fair terms. Otherwise, it’s a bad deal.”
India currently imposes import duties of up to 100% on fully assembled EVs, making it nearly impossible for foreign carmakers to compete in the domestic market without local production. The Modi government has, however, been actively courting global automakers to invest in manufacturing within the country as part of its “Make in India” initiative.
Elon Musk, CEO of Tesla and SpaceX, took a different stance, showing optimism about India’s market potential. Despite Trump’s remarks, Musk reaffirmed Tesla’s commitment to entering India. “We are excited about India. It’s a rapidly growing economy with a huge demand for sustainable energy solutions. Tesla is in discussions with the Indian government to explore opportunities that align with our mission,” Musk said in a statement on X (formerly Twitter).
Tesla has long sought access to the Indian market but has faced challenges due to the country’s high tariffs and policy uncertainties. In recent months, reports suggested that Tesla was considering setting up a factory in India, possibly in Gujarat or Maharashtra, to circumvent these duties. Sources close to the negotiations indicate that the Indian government is willing to offer incentives, including tax breaks and subsidies, to facilitate Tesla’s entry.
Musk’s plan reportedly includes opening flagship Tesla showrooms in major Indian cities such as Mumbai, Delhi, and Bangalore as a precursor to a larger manufacturing operation. Tesla’s rival, BYD, a Chinese EV manufacturer, has already gained a foothold in India, increasing pressure on Tesla to move quickly.
Trump’s stance reflects his broader protectionist trade policies, which have often placed him at odds with global businesses, including some of America’s biggest tech giants. Analysts suggest that Trump’s remarks could complicate Tesla’s plans, especially if trade relations between the U.S. and India become a contentious issue in the upcoming U.S. presidential election.
Meanwhile, the Indian government has largely remained silent on the Trump-Musk divide. Commerce Minister Piyush Goyal, who met Musk last year in the U.S., has previously stated that India is keen to attract Tesla but only under conditions that benefit the domestic economy.
With Tesla’s potential entry into India, the debate over trade policies and global investments is expected to intensify. As negotiations continue, all eyes will be on whether Musk can navigate the political and economic hurdles to finally bring Tesla’s EVs to Indian roads.
