An interim trade agreement between India and the United States lowers import duties on high-end American internal combustion engine vehicles. The deal specifically excludes electric vehicles from these tariff reductions.
This exclusion creates a significant barrier for Tesla, which has lobbied for lower duties to enter the Indian market. The move effectively blocks the company’s primary strategy for making its vehicles affordable to Indian consumers.
India’s decision signals a strategic intent to protect its domestic electric vehicle industry from foreign competition. This protectionist approach contrasts with India's ongoing trade negotiations with the European Union, where EV tariffs may be addressed differently.