MUMBAI: Elon Musk’s Tesla is not interested in manufacturing in India, and all they are looking at right now is to showrooms in India, the Minister of Heavy Industries HD Kumaraswamy said here on Monday after announcing the guidelines for Scheme for Promotion of Manufacturing of Electric Passenger Cars in India (SMEC).
Though he said once the application window for SMEC policy opens, the real intent of the companies will be known.
The SMEC policy which meant for attracting investment from global EV manufacturers will allow those players who apply under the scheme to import completely built units (CBUs) at a 15% import duty against the currently applicable rate of 70%.
The government officials told TNIE that Tesla, which had initially shown interest in setting up manufacturing units in India, attended only the first stakeholders’ consultation meetings to discuss the details of the scheme. After the first meeting, they skipped the subsequent meetings.
It is to be noted that US president Donald Trump has very close links with Tesla promoter Elon Musk and the latter was part of the Trump administration till recently. When asked about Musk’s plans to manufacture in India, Trump had commented it would be very unfair if Musk builds a factory in India.
India and the US are negotiating a trade deal and it is said that India might agree to lower tariffs on imports of cars, which varies from 70-10%. Under the India-UK trade deal, which was concluded recently, India has agreed to reduce the tariff on cars to 10%. However, small EVs have been kept out of the purview of the deal.
The minister of Heavy Industries Kumaraswamy said that global players like Mercedez, Volkswagen, Skoda, Hyundai and Kia have shown interest in applying under the SMEC. The application widow under the scheme is likely to open next week, and will remain open for 120 days. However, the government can reopen the window as and when required till March 15, 2026.
On likely chances of BYD applying under the scheme, government officials said while the Chinese EV maker is keen on manufacturing in India, the Indian government has no intention of allowing it to produce here.
The guidelines announced under SMEC require the applicants to invest USD 500 million or Rs 4,150 crore in the next three years. Other conditions include minimum 25% domestic value addition (DVA) in three years and 50% in five years. A total of 8,000 cars can be imported every year at 15% duty for five years. The government estimates Rs 6,484 crore revenue forgone per applicant under the scheme.