India plans to lower import tariffs on electric cars, rejecting requests from local automakers to delay such cuts by four years, as New Delhi prioritises closing a trade deal with the United States, government and industry sources told Reuters.

An immediate tariff reduction would benefit Tesla, which has finalized plans to open showrooms in Mumbai and New Delhi, aiming to launch its imported vehicles in India this year, noted Reuters. Trump has argued that Tesla currently faces an “impossible” situation selling in India and should not be required to set up a local factory.

However, New Delhi is serious about lowering EV tariffs - which have riled US President Donald Trump and his ally Tesla CEO Elon Musk - and the sector is set to be part of the first tranche of tariff reductions in a planned bilateral trade deal, this government official - and another - said.