India Slashes Import Duties on U.S. Automobiles, Paving Way for Tesla’s Entry and other US goods

Recently, the USA has shocked the world with its tariff imposition on its neighbouring countries and one of its biggest rivals- China. Mexico and Canada are US’s biggest trading partners but, this did not stop Donald Trump from imposing 25% tariff on these two countries. As an after-math of this tariff war, Canada has also imposed tariff on more than 1200 items and China has also imposed significant tariff on USA.

India’s finance minister has presented the Union budget for the financial year 2025-26 on February 1^st 2025. One of the highlights of India Union Budget is, India has significantly cut off custom duties for US automobile goods. As per Nirmala Sitaraman’s statement in a recent interview, she stated that this cut off in custom duties on US goods are a step towards India being self-reliant or “Atmanirbhar Bharat”.

Some of the many companies that are going to notice significant boost in their production and demand in Indian market are listed below:

Harley Davidson:

As per the budget, Nirmala Sitaraman pointed out that motorcycles of 1600 CC imported as Complete Built Up (CBU) units are going to have an import duty of 40% from 50% earlier with a decrease of 10% from the previous time.   This would increase the demand for Harley-Davidson motorcycles in India at a comparatively cheaper rate.

Tesla and Bumblebee Chevrolet Camero:

The import duty on Luxury cars priced above $40,000 has come on 70% from 125%. Experts say this could attract the manufacture of Tesla in India as Elon Mask has been eying the vast market that is present in India.  

Bumblebee Chevrolet Camero is one of the high-priced dream cars of youth in India. This cut-off in custom duties can be a great opportunity for people to get their dream cars at a cheaper rate.

Apple:

Apple has seen amazing profit in India since its Apple store launch. However Indian customers faced an increased price rate for various Apple products due to the high rate of tariff on US goods. As per announcements made by the Finance Minister of India, 28 items in mobile phone battery production are being exempted from tariff duties, making Apple products cheaper in the Indian market

PM Modi and Donald Trump are seen sharing strategic friendship since a very long time now, amid the ongoing tariff war, this move of tariff cut off can be a proven growth for Indian as well as US economy and further strengthen their diplomatic relationship.