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The recent high-voltage clash between former US President Donald Trump and Tesla CEO Elon Musk has gripped headlines globally. Beyond its entertainment value, this feud could send ripples through India–US trade relations at a crucial time when both sides are negotiating a mini-trade deal with potentially far-reaching impacts on sectors like electric vehicles (EVs), technology, and manufacturing.
Background: The Trump–Musk Feud Explained
In late June 2025, Elon Musk sharply criticised Trump’s “One Big Beautiful Bill,” calling it “insane” and “economically destructive.” The bill includes deep subsidies, new tax incentives, and higher tariffs, which Musk argues will damage innovation. Trump responded with trademark aggression, threatening to pull EV subsidies, question Musk’s citizenship, and even hinted at investigating Tesla’s overseas operations.
Tesla shares fell over 5% in the aftermath, and Musk hinted at supporting a new “America Party” to counter Trump’s influence. Meanwhile, Trump doubled down on his America First trade policy and signalled a harder line on tariff negotiations with nations including India.
Why India Should Care
At first glance, this may look like a purely American political drama. But India is deeply tied to both players:
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Tesla’s India entry: Elon Musk has long championed reducing India’s notoriously high auto import tariffs to launch affordable Teslas in India. Discussions are at an advanced stage to allow Tesla a direct-to-consumer model under the new EV policy.
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Trump’s trade policy: Trump has repeatedly called India the “tariff king” and wants a reciprocal trade deal that benefits US manufacturers and farmers. He may use Tesla’s interests as leverage, particularly if Musk is seen as opposing him politically.
If Trump returns to power or even as a political influencer, his fallout with Musk could complicate negotiations about EV tariff structures and other technology trade aspects between India and the US.
Key Issues That Could Impact the India–US Deal
1. EV Tariffs and Localisation
India is moving rapidly to position itself as an EV manufacturing hub. However, Tesla’s demands for tariff relaxation on imported vehicles clash with India’s “Make in India” manufacturing goals.
If Trump chooses to punish Musk’s global operations, he could block any favourable terms on Indian imports of US-made Teslas, or push India to commit to higher local value addition for EVs as part of the trade deal.
2. Technology Transfer & Innovation
Musk’s companies, including SpaceX and Starlink, have been exploring Indian partnerships. However, Trump’s renewed attacks on “Big Tech” and “tech billionaires” could discourage cross-border technology transfer and collaborative projects.
This would directly affect Indian SMEs working in high-tech supply chains, as any restrictions on joint projects or technology licensing would reduce growth opportunities.
3. Timing Pressure on Trade Talks
The US wants to finalise mini trade deals with key partners, including India, before new tariff deadlines in July and August. India, on the other hand, is holding firm on protecting its dairy and agriculture sectors.
If Musk’s feud delays US consensus on EV and technology clauses, the entire timeline of the India–US deal could slip — affecting Indian SMEs looking for better access to US markets in sectors like textiles, auto components, and IT services.
SMEStreet Analysis: Opportunities Amid the Uncertainty
While the Trump–Musk drama raises real risks, it also creates an opportunity for Indian SMEs:
- EV ecosystem: India could become a credible alternative to China for EV manufacturing if Tesla diversifies away from US politics — opening supplier opportunities for battery packs, charging infrastructure, and software.
- Tech partnerships: Indian technology SMEs can use this moment to strengthen local innovation, reducing over-reliance on big American partners whose politics may be volatile.
- Export diversification: With Trump pushing for reciprocal tariffs, Indian exporters may get a clearer sense of future trade rules, helping them build more stable US partnerships, especially in traditional sectors like textiles, pharma, and engineering goods.
Important to Note
What happens next between Trump and Elon Musk could go far beyond personal rivalry. It is a clash of two economic visions — Trump’s protectionist, manufacturing-heavy approach versus Musk’s borderless, innovation-driven ambition.
For India, this power struggle could directly shape the future contours of its trade deal with the US, especially on critical sectors like EVs, technology transfer, and market access.
Indian SMEs should watch this series of dramatic developments closely — and get ready to adapt, because in global trade, even personal battles between billionaires can change the rules of the game.