The United States is advocating for the elimination of import tariffs on cars in its trade negotiations with India, aiming to facilitate the entry of American automobile manufacturers, notably Tesla, into the Indian market. India currently imposes import duties on automobiles that can reach up to 110%, among the highest globally.
In a recent development, India reduced the customs duty on cars priced over $40,000 from 125% to 70%, a move designed to attract luxury automakers like Tesla.
Despite this reduction, the U.S. is pushing for a complete removal of these tariffs to further ease market entry for its car manufacturers.
However, India is cautious about reducing tariffs to zero immediately. Domestic automakers, such as Tata Motors and Mahindra & Mahindra, express concerns that eliminating tariffs could hinder local manufacturing and investment.
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The Indian government is also wary of the potential impact on its automotive industry and economy.
The outcome of these negotiations remains uncertain, as both nations seek to balance their economic interests. The U.S. aims to secure favorable conditions for its automakers, while India strives to protect and promote its domestic automotive sector.