US eyes zero tariff on cars in India trade deal as Tesla entry nears, sources say

By Shivangi Acharya and Aditi Shah

NEW DELHI (Reuters) - The United States wants India to destruct tariffs connected car imports nether a projected commercialized woody betwixt the 2 nations, but New Delhi is reluctant to instantly bring down specified duties to zero adjacent arsenic it considers further cuts, sources told Reuters.

India's precocious car tariffs volition diagnostic successful ceremonial talks for a bilateral commercialized woody that are yet to begin, said 1 of the 3 sources, each of whom were briefed connected the matter, paving the mode for American electrical conveyance shaper Tesla, which is gearing up for an India launch.

Taxes connected cars imported into India are arsenic precocious arsenic 110%, which Tesla main Elon Musk has criticised arsenic being among the steepest successful the world. The EV elephantine past twelvemonth shelved its plans to participate the world's third-largest car marketplace for a 2nd time.

Musk has present recovered enactment from U.S. President Donald Trump, who has repeatedly railed against India's precocious taxes and successful an code to Congress connected Tuesday slammed the country's car tariffs of much than 100%, threatening reciprocal action.

"The U.S. inquire is for India to bring tariffs down to zero oregon negligible successful astir sectors, but agriculture," the archetypal root said, adding the anticipation connected New Delhi eliminating car tariffs was "clearer than immoderate other".

A 2nd root said India was "listening to the U.S." and had not pushed back, adding it would respond with its presumption connected the tariffs aft consulting section industries.

The bureau of United States Trade Representative, India's commercialized ministry, and the overseas affairs ministry did not respond to requests for comment.

TRADE WORTH $500 BILLION

After a gathering betwixt Trump and Indian Prime Minister Narendra Modi past month, the 2 nations agreed to resoluteness tariff rows and enactment connected the archetypal conception of a woody by the autumn of 2025, aiming for bilateral commercialized worthy $500 cardinal by 2030.

Indian commercialized curate Piyush Goyal is connected a astir week-long travel to the U.S. and connected Tuesday met U.S. Commerce Secretary Howard Lutnick to prosecute commercialized talks. He is besides expected to conscionable the United States Trade Representative Jamieson Greer.

While India is improbable to relent to U.S. demands to trim tariffs connected car imports to zero immediately, it has been priming the manufacture to hole for a little tariff authorities and beryllium unfastened to competition, said the archetypal root and a 4th person.

Last month, the Indian authorities met home carmakers to determine connected immoderate tariff cuts and recognize their reservations implicit taxes going down to zero immediately, the archetypal root added.