India-U.S. Trade Talks Heat Up Over High Auto Tariffs

India’s high auto tariffs—up to 110%—are now a key focus in upcoming U.S.-India trade talks, paving the way for Tesla’s long-anticipated entry into the Indian market. Elon Musk, who previously criticized these steep tariffs, now has support from President Donald Trump, who has threatened reciprocal trade measures if India doesn’t lower its import duties.

The U.S. is urging India to reduce auto tariffs to zero or near-zero, except for agricultural goods. While India is open to discussions, it is unlikely to remove tariffs immediately. Domestic automakers like Tata Motors and Mahindra oppose tariff reductions, fearing competition from foreign EV makers.

With bilateral trade expected to hit $500 billion by 2030, both nations are looking to ease tariff disputes. Indian Trade Minister Piyush Goyal is currently in the U.S. for high-level trade talks.

For importers of alcohol, food, and beverages, these discussions signal potential trade shifts that could impact tariff structures across various sectors. As India gradually reduces tariffs on luxury goods, industries should prepare for evolving trade policies.

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