America has demanded "zero tariff" after the tussle over Tesla; Read about domestic companies opinion

America and India are in negotiations for a possible trade agreement. America is, however, demanding that India scrap the high duty on car imports entirely. Media reports indicate that the White House has called on India to reduce the tariff on cars imported from abroad to zero. American car manufacturer Tesla has also requested a reduction in tariffs on cars in India, for which a decision is still pending from the Indian government.

A massive 110% duty is levied on cars being imported to India, which has already angered the CEO of Tesla, Elon Musk. He has now gained further support from US President Donald Trump. Addressing Congress, Trump called tariffs on the Indian auto industry unfair and threatened to retaliate. Trump has talked about imposing retaliatory tariffs on Indian imports.

The US wants India to eliminate tariffs in most sectors, including automobiles. According to media reports, the US clearly expects India to either eliminate or reduce tariffs on car imports.

The Indian government has certainly heard this demand of the US but has not yet given any concrete response. The government will first consult the domestic industry and then make a decision.

According to sources, the Indian government recently met the giants of the automobile sector to understand their concerns. Indian car manufacturers, especially companies like Tata Motors and Mahindra, have been opposing the reduction of import duty for a long time. They believe that if the tariff is removed, the prices of foreign cars will fall, which will harm domestic companies and the investment received for car manufacturing in the country may also be affected.