US President Donald Trump stopped Elon Musk’s Tesla from building a manufacturing plant in India. India’s Heavy Industries Minister, H.D. Kumaraswamy, announced Tesla’s lack of interest in local manufacturing during a press conference. Tesla will only operate showrooms in India and will not invest in a factory or production plant.
Kumaraswamy shared details about India’s new scheme to promote local electric vehicle production. The plan reduces import duties on electric cars priced above $35,000 by up to 15%, but only if companies invest $50 million and build a manufacturing plant in India. Several global brands like Mercedes-Benz, Volkswagen, Hyundai, and Kia have shown interest under this scheme.
When asked about Tesla and Vietnam’s VinFast, Kumaraswamy said Tesla is not interested in local manufacturing. Tesla had only opened two showrooms in Delhi and Mumbai to sell imported vehicles. Earlier reports showed Tesla lobbying for incentives, and Elon Musk had planned to visit India in 2024 with a $3 billion investment proposal but canceled due to heavy responsibilities.
Tesla opposes India’s high import taxes on electric vehicles. The new scheme offers tax breaks, cutting duties from 70-100% down to 15% for approved companies. However, these companies must set up fully functional plants within three years, and increase local component use to 25% in three years and 50% in five years.
Trump had stated in February that Tesla building a plant in India would be unfair to the US. Recently, he emphasized that companies like Tesla should make cars and parts in America, supporting domestic manufacturing and jobs. This move highlights ongoing tensions between US economic interests and global business expansion.