The US president has said setting up an EV factory in the country would “hurt” America due to the high tariffs

US President Donald Trump has warned that Elon Musk’s plans to establish a Tesla factory in India would be “unfair” to the American economy, as India is among the countries that charge high import duties on foreign cars and components. 

This comes amid reports in Indian media that Tesla has started hiring talent in the country – months after its plans to enter the promising market were apparently put on hold.

Speaking to Sean Hannity of Fox News in a joint interview with Musk, Trump discussed his plan to introduce reciprocal tariffs against trade partners who “take advantage of us, and they do it with tariffs.” 

Citing India as an example, Trump said: “Now, if he [Musk] builds the factory in India, that’s okay, but that’s unfair to us. It’s very unfair.” He added that it is “impossible” for Musk to sell a car in India due to the high import duties on foreign vehicles. Musk noted that tariffs in India can reach up to 100%.    

The US president added that he raised concerns about India’s “high duties” on cars during Prime Minister Narendra Modi’s visit to the US last week, but agreed to work toward a trade deal to resolve the standoff over tariffs. Trump’s proposed reciprocal tariff system would involve imposing identical tariffs on imports from other countries, mirroring the rates those countries impose on US goods.

Trump’s remarks coincided with reports that Tesla initiated its hiring process in India, signaling its intention to launch operations in the country. The company listed around 13 Indian-based job openings on its LinkedIn page earlier this week. Media reports also suggest that Tesla has selected locations to set up showrooms in New Delhi and Mumbai.

During his visit to Washington last week, Modi met with Musk and discussed a range of topics, including space and technology.

Had a very good meeting with @elonmusk in Washington DC. We discussed various issues, including those he is passionate about such as space, mobility, technology and innovation. I talked about India’s efforts towards reform and furthering ‘Minimum Government, Maximum Governance.’ pic.twitter.com/7xNEqnxERZ

— Narendra Modi (@narendramodi) February 13, 2025

Tesla does not currently manufacture vehicles in India but has been seeking to enter the fast-growing market for over a year. In an effort to attract foreign electric vehicle manufacturers, including Tesla, New Delhi has introduced a new EV policy that offers incentives such as reduced import duties to companies investing at least $500 million in local manufacturing units.

Previously, imported cars valued above $40,000 were subject to a 100% customs tax, while those below that threshold faced a 70% duty. The revised tariffs, reportedly introduced after Tesla’s lobbying efforts, are seen as an attempt to create a more favorable business environment for foreign EV companies.