US President Donald Trump has voiced strong opposition to Tesla CEO Elon Musk’s plans to establish a manufacturing plant in India, stating that it would be "very unfair" to the United States. In an interview with Fox News, Trump criticized India's high import tariffs on automobiles, arguing that they make it "impossible to sell a car" in the country. He reiterated his long-standing stance on trade imbalances, saying that foreign nations, including India, take advantage of the U.S. through high tariffs on American goods.
India currently imposes steep import duties of up to 100% on electric vehicles (EVs), a measure designed to protect its domestic automobile industry. This policy has been a major barrier for foreign automakers like Tesla, which has been eyeing the Indian market for years but has refrained from entering due to the prohibitive costs of importing its vehicles. However, the Indian government recently introduced a new EV policy in March 2025 that significantly reduces import taxes to 15%—provided that automakers commit to investing at least $500 million and setting up local manufacturing plants.
Despite these challenges, Tesla has accelerated its India expansion plans. Reports indicate that the company has finalized locations for two showrooms in New Delhi and Mumbai and has begun hiring for key roles, including service technicians and customer engagement managers. Additionally, Tesla is exploring the possibility of setting up a manufacturing hub in Maharashtra, particularly in the Pune region, which boasts a well-established automotive ecosystem. The company has already posted job listings on its LinkedIn page, signaling its intent to establish a local presence.
During the Fox News interview, Trump doubled down on his criticism of Tesla’s India plans, expressing concerns that a U.S.-based company like Tesla building a factory in India would be detrimental to American interests. “Now, if he built the factory in India, that’s okay, but that’s unfair to us. It’s very unfair,” Trump said. His comments come amid broader trade negotiations between the U.S. and India, with tariffs being a key point of contention. Last week, Trump met with Indian Prime Minister Narendra Modi, where he reportedly raised concerns about India's tariff policies while also expressing optimism about reaching a trade agreement.
Trump’s criticism of India’s tariffs is not new. In the past, he has cited India as one of the highest tariff-imposing countries in the world. He recalled a specific example involving Harley-Davidson motorcycles, which faced tariffs so high that they struggled to gain traction in the Indian market. “India traditionally is the highest, just about the highest tariff country. They charge more tariffs than any other country. But I mean what they charge we’re going to be charging them. It’s a beautiful, simple system. We don’t have to worry about charging too much or too little,” Trump said.
While Tesla is keen to enter the Indian market, Musk has previously voiced frustration over India’s strict import policies. He has repeatedly argued that the country’s tariffs make it challenging for foreign automakers to operate without local production facilities. At the same time, the Indian government is eager to attract foreign investments in the EV sector as part of its broader push for cleaner energy solutions. The recent policy change allowing reduced import duties for companies willing to invest in local manufacturing is seen as an attempt to lure Tesla and other global automakers.
If Tesla proceeds with its India plans, it could unlock significant growth opportunities in the world’s third-largest auto market, where EV adoption is still in its early stages. India’s EV sales reached nearly 100,000 units last year, and the government has been rolling out incentives to boost electric mobility. The company’s entry could also spark increased competition among domestic players such as Tata Motors and Mahindra, which currently dominate the country’s EV market.
However, Trump’s comments suggest that Tesla’s India expansion could become a politically charged issue in the U.S., particularly as he gears up for another presidential term. His remarks reflect a broader trend of economic nationalism, where American companies are urged to prioritize domestic investment over foreign expansion. Whether Tesla proceeds with its India plans despite Trump’s objections remains to be seen, but the debate highlights the ongoing friction between globalization and national economic policies.
As Tesla moves forward, the company must navigate the complexities of international trade, political pressures, and market dynamics. Musk, known for his strategic business decisions, will have to weigh the benefits of tapping into India’s growing EV market against the potential backlash in the U.S. Amid shifting trade policies and evolving geopolitical considerations, Tesla’s India expansion is set to be a closely watched development in the global automotive industry.
