Wed Mar 05 14:18:35 UTC 2025: **India Rejects US Demand for Zero Auto Tariffs, But Considers Cuts**

**Washington, D.C., March 5, 2025** – The United States is pressing India to eliminate tariffs on car imports as part of a proposed bilateral trade deal, but India is resisting immediate zero-tariff concessions, according to sources familiar with the matter. While New Delhi is considering further tariff reductions, it’s unlikely to meet the US demand for complete elimination.

Current tariffs on imported cars in India reach as high as 110%, a figure criticized by Tesla CEO Elon Musk and US President Donald Trump. Musk previously suspended Tesla’s planned India launch due to these high tariffs. Trump, in a recent address to Congress, condemned the tariffs and threatened reciprocal action.

The US proposal reportedly aims for zero or negligible tariffs across most sectors, excluding agriculture, with the auto tariff reduction being a key priority. India, however, is consulting with domestic automakers, including Tata Motors and Mahindra & Mahindra, who have voiced concerns about the impact of lower tariffs on the burgeoning domestic EV market.

India recently lowered import tariffs on some items, including high-end motorcycles, signaling a willingness to adjust its trade policies. While India hasn’t completely rejected the US demands, it’s emphasized the need to protect its domestic auto industry. The two countries aim to reach a preliminary trade agreement by the fall of 2025, targeting $500 billion in bilateral trade by 2030. Discussions are ongoing between Indian Commerce Minister Piyush Goyal and US officials. The Indian government’s next steps will significantly shape the future of the US-India trade relationship.

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