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Tesla Delays India Entry as Import Tariffs Remain a Major Hurdle

The EV giant has finalized showrooms and imported test vehicles but awaits tariff reforms and trade negotiations before setting a launch date.

Tesla Inc. vehicle facility is pictured in Costa Mesa, California, U.S., November 1, 2023. REUTERS/Mike Blake/File Photo
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Overview

  • Tesla CFO Vaibhav Taneja confirmed the company is carefully evaluating the timing of its India entry due to prohibitively high import tariffs that double vehicle costs.
  • India's 100% import duties and luxury taxes have caused consumer anxiety and are a significant barrier to Tesla's market entry strategy.
  • Tesla has leased showroom space in Mumbai, imported Model Y vehicles for testing, and posted local job openings, signaling preparatory steps for a potential launch.
  • Elon Musk plans to visit India in 2025 following discussions with Prime Minister Narendra Modi on technology collaboration and market entry.
  • Ongoing U.S.–India trade talks and India's EV policy, which offers reduced tariffs for manufacturers investing in local production, are critical to Tesla's decision-making process.