The United States is urging India to eliminate tariffs on car imports under a proposed trade deal, but India is hesitant to reduce them to zero immediately.
While India is open to further cuts, its high auto tariffs, reaching up to 110%, remain a key issue in trade negotiations. These tariffs have been criticized by Tesla CEO Elon Musk, who previously shelved plans to enter India.
U.S. President Donald Trump has also condemned India's high taxes, threatening reciprocal action.
India is considering the U.S. request but has yet to finalize its stance. Trade talks between both nations are ongoing, with Indian Trade Minister Piyush Goyal engaging in discussions in the U.S.
Meanwhile, India is preparing its domestic car industry for a possible lower tariff regime.
India's car market is highly protected, and local manufacturers, including Tata Motors and Mahindra & Mahindra, oppose tariff reductions, fearing it could harm local investments.
While India recently cut tariffs on luxury motorcycles and plans to review surcharges on high-end cars, it remains cautious about fully removing import duties on automobiles.
