Trump says unfair to US if Musk builds factory in India

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NEW DELHI (Reuters) -U.S. President Donald Trump has said that if Tesla were to build a factory in India to circumvent that country’s tariffs, it would be “unfair” to the U.S., in an interview with Fox News which aired on Tuesday.

Trump called out India’s high duty on cars during Prime Minister Narendra Modi’s visit to the U.S. last week, but agreed to work towards an early trade deal and resolve their standoff over tariffs. 

Tesla’s CEO Elon Musk has long criticised India for having import tariffs of around 100% on EVs which protect local automakers such as Tata Motors in the world’s third largest auto market, where EV adoption is still at a nascent stage.

Trump said it is “impossible” for Musk to sell a car in the South Asian nation.

“Every country in the world takes advantage of us, and they do it with tariffs… It is impossible to sell a car, practically, in, as an example, India,” he said.

India’s government in March unveiled a new EV policy lowering import taxes substantially to 15% if a carmaker invests at least $500 million and sets up a factory.    

Reuters reported on Tuesday that Tesla has selected locations for two showrooms in the Indian cities of New Delhi and Mumbai, and posted job ads for 13 mid-level roles in India. It does not currently manufacture any vehicles in India.

Trump said it would be “unfair” to the U.S. if Musk did decide to build a factory there. 

“Now, if he built the factory in India, that’s okay, but that’s unfair to us. It’s very unfair,” Trump said in the interview. 

India’s foreign ministry did not immediately respond to a request for comment.

Trump’s plans for reciprocal tariffs on every country that taxes U.S. imports have raised the risk of a global trade war with American friends and foes. 

(Reporting by Tanvi Mehta and Hritam Mukherjee; Editing by Elaine Hardcastle)