US Asks India to Cut Car Tariffs from 110% to 0%

The US is seeking to persuade India to reduce New Delhi’s tariffs on car imports from Washington to 0%, sources familiar with the matter told Reuters.

However, India remains reluctant to immediately reduce the tariffs to zero, even if it is considering reducing them.

The issue of India’s high tariffs on cars is set to come up in the second round of trade talks with Washington, paving the way for US electric carmaker Tesla to enter the Indian market.

India’s tariffs on car imports are around 110%, a situation that Tesla CEO Elon Musk has criticized, and the company halted its plans to enter the world’s third-largest car market for the second time last year.

The Trump administration has been asking India to reduce tariffs to zero or negligible on most sectors except agriculture, noting that expectations of New Delhi’s removal of the tariffs on cars have been clearer than anything else.

Another source confirmed that India is listening to America and has not backed down, adding that it will respond with its position on tariffs after consulting with local industries.

After a meeting between Trump and the Indian prime minister last month, the two sides agreed to resolve differences over tariffs and work on the first part of the deal by the fall of this year, with the goal of achieving half a trillion dollars in bilateral trade by 2030.