US Wants Zero Tariff on Car Imports in India Under Proposed Trade Deal: Sources

The United States wants India to reduce car import tariff to zero as part of a proposed trade deal which would pave the way for Tesla’s entry into the market. However, India is hesitant to reduce tariffs to zero immediately and is consulting with local industries before responding, sources told Reuters.

India’s high auto tariffs will feature in formal talks for a bilateral trade deal that are yet to begin, said one of the three sources. Taxes on cars imported into India are as high as 110% which Tesla chief Elon Musk has criticised as being among the steepest in the world.

Elon Musk has now found support from the United States President Donald Trump in this matter. Trump has repeatedly railed against India’s high taxes and in an address to Congress on 4th March slammed the country’s auto tariffs of more than 100%. The US President has even threaten for reciprocal action.