Tesla is finally entering India, starting with a Mumbai showroom and pushing for lower import tariffs in a high-stakes trade deal!

Tesla Inc. is making its long-awaited entry into the Indian market, starting with a new showroom in Mumbai’s Bandra Kurla Complex (BKC). This move follows Indian Prime Minister Narendra Modi’s recent visit to the United States, where discussions on trade and import tariffs took center stage.

Tesla’s First Showroom in India

Tesla has signed a five-year lease for a 4,003 sq ft showroom in Maker Maxity, BKC, close to Chhatrapati Shivaji Maharaj International Airport. The lease deal, valued at approximately Rs. 3.89 crore ($446,000) for the first year, includes a 5% annual rent increase, bringing the total cost to around Rs. 21.77 crore ($2.5 million) over five years.

The Model 3 is expected to be Tesla’s launch model in India, given its affordability, but the Model Y could be a more practical choice due to its higher ground clearance. Tesla will initially import vehicles via the Completely Built Unit (CBU) route, which attracts high tariffs—something CEO Elon Musk has frequently criticized.

US-India Trade Deal and Auto Tariffs

The US has urged India to eliminate import tariffs on automobiles as part of a proposed trade deal. Currently, tariffs on CBU imports can go as high as 110%, which has been a major point of contention for Tesla and the US government. President Donald Trump has openly criticized these tariffs, even threatening reciprocal measures.

While India is considering reductions, it is unlikely to bring tariffs down to zero immediately. Domestic carmakers have raised concerns that lowering import duties would harm local manufacturing by making imported vehicles more competitive. However, the Indian government has been in talks with automakers to discuss potential tariff adjustments.

After a recent meeting between Modi and Trump, both nations agreed to work toward a trade deal targeting $500 billion in bilateral trade by 2030. Indian Trade Minister Piyush Goyal has been engaging with US officials, including Commerce Secretary Howard Lutnick and US Trade Representative Jamieson Greer, to further these negotiations.

Future of Tesla in India

With Tesla’s showroom confirmed and trade talks ongoing, India’s EV market is on the brink of a major transformation. While import duties remain a challenge, potential tariff reductions could pave the way for Tesla’s long-term success in the country.

Source: Reuters