Donald Trump Calls Tesla’s India Expansion “Very Unfair”

The global electric vehicle (EV) market is witnessing a major shift, with Tesla making moves to expand its presence in India. This development has caught the attention of former US President Donald Trump, who has expressed strong disapproval of Tesla CEO Elon Musk's plans to set up a factory in India. In a joint interview with Fox News host Sean Hannity, Trump called India's trade policies unfair and suggested that Musk's decision to invest in India would be detrimental to the United States.

Trump’s Reaction to Tesla’s India Plans

Donald Trump has been vocal about what he perceives as unfair trade practices by other countries. Speaking about Tesla’s potential entry into India, Trump argued that India's tariffs on foreign cars make it "impossible" for US automakers to compete. He pointed out that India has long imposed high import duties, making it difficult for companies like Tesla to sell vehicles in the country.

"Every country in the world takes advantage of us, and they do it with tariffs… It is impossible to sell a car, practically, in, as an example, India," Trump said during the interview. He further stated that if Tesla builds a factory in India, it would be "very unfair" to the United States, implying that such an investment should be made domestically rather than overseas.

India’s New EV Policy and Tesla’s Entry

India has historically had high import duties on electric vehicles, with tariffs reaching nearly 100% in some cases. This policy has discouraged foreign automakers, including Tesla, from entering the market. However, in March 2025, the Indian government introduced a new EV policy aimed at attracting foreign investment. Under this policy, import duties have been reduced significantly to 15%—but only for carmakers that commit to investing at least $500 million and setting up a manufacturing facility in India.

This policy shift has reignited Tesla’s interest in India. According to reports, Tesla is expected to enter the Indian market as early as April this year. The company has already begun hiring staff, with job postings for at least 13 mid-level positions in India. Additionally, Tesla has reportedly chosen locations for its first two showrooms in India, in Mumbai and New Delhi.

The Challenges Tesla Faced in India

Tesla’s journey into India has not been straightforward. Elon Musk has long expressed frustration over India's protectionist policies, which heavily favor domestic automakers like Tata Motors. The high import duties on EVs have been a major barrier for Tesla, making it nearly impossible for the company to sell its vehicles at competitive prices in India.

Musk has previously lobbied the Indian government to lower these tariffs, arguing that Tesla should be allowed to sell imported EVs at a reasonable tax rate before committing to local manufacturing. However, India remained firm on its stance, insisting that Tesla must invest in local production if it wanted tax incentives. The new EV policy appears to be a compromise that aligns with Tesla’s expansion plans while ensuring economic benefits for India.

Trump’s Tariff Threats and Economic Concerns

Trump’s criticism of Tesla’s India expansion comes amid his broader push for a reciprocal tariff system. Under this proposal, the US would impose the same level of tariffs on imports from any country that taxes American goods. Trump believes that this approach would pressure other nations to reduce their tariffs and level the playing field for American businesses.

"If I said 25%, they'd say, 'Oh, that's terrible.' I don't say that anymore… because I say, 'Whatever they charge, we'll charge.' And you know what? They stop," Trump said, explaining his tariff strategy.

His comments signal a potential trade war risk, especially if he wins the 2024 US presidential election. If Trump enforces reciprocal tariffs, it could impact India-US trade relations and disrupt Tesla’s plans.

Why India is Key for Tesla

Despite the controversy, India remains a crucial market for Tesla. The country is the third-largest automobile market in the world, with a growing interest in EVs. While EV adoption in India is still at an early stage, government initiatives and rising fuel costs are pushing consumers toward electric vehicles.

For Tesla, establishing a manufacturing base in India offers multiple advantages. It would allow the company to benefit from lower production costs, tap into a massive consumer base, and avoid the steep import taxes that previously made Tesla vehicles unaffordable for most Indian buyers. Moreover, manufacturing in India could help Tesla expand its footprint in other Asian markets.

The Geopolitical Impact of Tesla’s India Move

Tesla’s potential expansion into India is not just an economic move—it has geopolitical implications as well. The US and India have been strengthening trade relations, with both countries exploring new economic partnerships. During his recent US visit, Indian Prime Minister Narendra Modi met with Elon Musk, further fueling speculation about Tesla’s entry into the Indian market.

Trump’s opposition to Tesla’s India plans may complicate this relationship. If he returns to power and enforces stricter trade policies, it could lead to tensions between Washington and New Delhi. On the other hand, India is unlikely to back down from its push to attract foreign investments, especially in the EV sector, which is seen as a priority for its economic and environmental goals.

What’s Next for Tesla in India?

Despite Trump’s criticism, Tesla seems determined to move forward with its India plans. The company’s hiring activity and showroom preparations suggest that it is laying the groundwork for a major launch. If Tesla successfully establishes manufacturing in India, it could pave the way for other global automakers to follow suit.

However, challenges remain. Tesla will have to compete with established local players like Tata Motors and Mahindra, who already have a strong presence in the Indian EV market. Additionally, building a robust charging infrastructure will be critical for Tesla’s success in India.

Conclusion

Donald Trump’s remarks about Tesla’s India expansion reflect his long-standing concerns about trade imbalances and tariffs. While he sees Elon Musk’s investment in India as a disadvantage for the US, the reality is that Tesla is making a strategic move to enter one of the world’s largest and fastest-growing car markets.

India’s new EV policy has opened doors for foreign automakers, and Tesla is seizing the opportunity. Whether Trump’s threats of reciprocal tariffs will impact Tesla’s plans remains to be seen, but for now, all signs indicate that the company is gearing up for its much-anticipated entry into India.