Tesla Is Ready To Open Its Next Global Chapter - India

According to sources, Tesla is set to officially enter the Indian market by shipping thousands of vehicles to a port near Mumbai in the coming months. The electric vehicle (EV) giant plans to begin sales in three major Indian cities—Mumbai, Delhi, and Bangalore—around the third quarter of this year.

The specific models Tesla will introduce to India, as well as where these vehicles will be produced, will depend on the progress of tariff negotiations between India and the United States. A key factor is whether India will reduce the current effective import duty of 110% for Tesla vehicles.

Tesla has long harbored ambitions to enter the Indian market. There were even rumors at one point that the company would establish a factory in India. However, the country's high automotive import tariffs have kept Tesla at bay.

The plan to enter India gained momentum after Indian Prime Minister Narendra Modi met with Tesla CEO Elon Musk in Washington last week.

Sources reveal that, as part of a broader trade agreement with the U.S., the Indian government is expected to ease restrictions on EV imports. This could include raising the cap on the number of EVs eligible for preferential tariff policies from 8,000 to as many as 50,000 vehicles. Additionally, the Indian government is considering options such as reducing import duties and allowing certain vehicles to enjoy lower tariff rates.

Currently, India imposes tariffs equivalent to an effective tax rate of 110% on cars priced above $40,000. In previous negotiations, Tesla has repeatedly urged the Indian government to lower these rates and eliminate additional taxes.

Despite significantly lower tariffs for automakers that invest in local production in India, sources indicate that Tesla's operations in the country are likely to be limited to imports for now.

Tesla has previously discussed the possibility of setting up an assembly plant in India, but there are no current indications that the company plans to manufacture vehicles there.

Notably, former U.S. President Donald Trump has expressed opposition to Tesla building a factory in India. He argued that it would be unfair to the U.S. if Tesla were to establish a plant in India solely to circumvent tariffs.