India’s 110% Car Tariffs Become Harder to Defend in Trump Era
The country, which has long resisted demands to liberalize this prized and protected market, signals it will come to the negotiating table.
When Hridesh Baweja’s beloved Chevrolet Optra kicked the bucket a few weeks ago, the New Delhi businessman knew buying a new Chevy was off the table. General Motors Co. stopped manufacturing locally when it exited India in 2017, and the country’s duties on imported vehicles—as high as 110%—mean a US replacement would be comically expensive. So would any of the other overseas-made models that have caught his eye, from Audis to BMWs.
That is, unless India agrees to lower its tariff wall on automobiles—the steepest for any major economy. It looks possible for the first time in decades as the world rewires its supply chains and trade alliances amid US President Donald Trump’s latest brinkmanship. India is keen to avoid additional levies on the $87 billion in goods it ships each year to its biggest export market, the US, and trade negotiators are at the table hoping to finalize some kind of agreement before the fall, with cars expected to be one of the central bargaining chips.