NEW DELHI: India on Tuesday said the US-based electric carmaker Tesla is welcome to make and sell electric vehicles (EVs) here but showed red flags when it comes to importing vehicles from China, where it has a manufacturing facility, and selling it in the domestic market.
“If Elon Musk (Tesla CEO) is ready to manufacture in India then there is no problem … Come to India, start manufacturing, India is a large market they can export from India,” said Union Transport Minister Nitin Gadkari at the Raisina Dialogue. He added, “But if he wants to manufacture in China and sell in India then it cann’t be a good proposition for India.” The minister’s statement comes at a time when Tesla has gone silent on its India plans after its effort to seek import duty cuts received a cold response from Indian officials.
The firm had last year registered an Indian unit by incorporating itself in Bengaluru and was in talks with the Karnataka government for setting up a facility. It even appointed senior officials in India. It was expected that Tesla would launch its first EV in India before the end of year 2021. However, this never happened.
For the majority of 2021, Tesla, without any success, lobbied hard to seek import duty cuts for imported electric cars. Currently, this ranges from 60% to 100%, depending on engine size and cost, insurance, and freight (CIF) value less or above $40,000. According to government sources, Tesla had requested to standardize the tariff on electric cars to 40% irrespective of the customs value.
Elon Musk, who on late Monday inked a deal to buy Twitter, had in January this year said that they were facing a ‘lot of challenges’ for Tesla car launch in India. He had even said that a Tesla factory to produce cars in India is “quite likely” if they can first begin sales with imported vehicles. Tesla, however, did not even apply to avail incentives under the Rs 44,000 crore PLI scheme approved by the Indian government.