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The ongoing geopolitical tensions in the Asia-Pacific region, especially with China, further complicate these developments. As Tesla seeks to diversify its supply chain outside of China, India presents a lucrative alternative. The potential for a well-negotiated deal between Tesla and India could facilitate a more favorable environment for local manufacturing while allowing India to boost its domestic automotive sector.
The political climate in India, including Modi’s government being perceived as more favorable to Tesla post-Trump’s election, could be critical in shaping the future of this deal. The timing appears strategic, as geopolitical developments may be creating more urgency for both parties to finalize a collaboration that bolsters their economic growth.