- By Divanshi Sharma
- Tue, 07 Nov 2023 08:18 PM (IST)
- Source:JND
Tesla In India: Soon the dream of many Indian car enthusiasts will come true as Elon Musk's Tesla, a maverick in manufacturing electric cars, is going to enter the domestic market. According to a report by the Economic Times, the Indian government has asked the necessary departments to expedite the process to provide all the requisite approvals to Tesla by January 2024. If all goes well, we can see Tesla on Indian roads by the end of 2024 or early 2025.
Elon Musk, the world's richest man, has time and again shown his keen interest in bringing Tesla electric cars to India, which is dubbed as a blooming EV market, however, the investment proposals hit a roadblock given the Indian government's strict policies.
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The ET report further stated that the Prime Minister's Office (PMO) on Monday held a meeting with top officials and discussed Tesla's proposal to make investments in India. While the main agenda of the meeting was around general policy discussions and the next phase of electric vehicle manufacturing in India, expediting approvals to Tesla for its India entry was also discussed.
Notably, this came after Prime Minister Narendra Modi met Elon Musk during his US visit in June. Since PM Modi's meeting with Musk, the Union Ministries of Commerce and Industry, Heavy Industry, and Electronics and Information Technology have been engaged in discussions over Tesla's proposed entry into India.
"Though the agenda of the meeting was centred on general policy matters, fast-tracking approvals by January 2024 to Tesla's proposed investment in the country was spelt out," ET quoted a top official as saying.
"Ministries and government departments have been asked to iron out any differences with Tesla and pave the way for announcing the company's India manufacturing plan at the earliest," another official said, as quoted by ET.
What caused the roadblock between the Indian government and Tesla?
According to India's rules for Customs, there is no difference between electric cars and other petrol and diesel luxury cars and high duties are levied on the import of these vehicles, seemingly to encourage local manufacturing. However, Musk had asked the government to levy 40 per cent import duties on fully assembled Tesla electric cars against 60 per cent levied on vehicles priced below Rs 33 lakh (USD 40,000).
As per Indian Customs rule, a 100 per cent duty is imposed on cars sold over the aforementioned price range. Tesla, however, had demanded that its cars should be treated as electric cars and not luxury cars. Musk reportedly had also demanded permission to sell some Tesla cars first before setting up a manufacturing plant in India.
India had insisted on a commitment from the EV maker to domestically manufacture its cars in India, in exchange for any import duty concession. Instead of asking for a direct concession on import duties, the Indian government had also asked Tesla to apply for a Production-Linked Incentive (PLI) scheme that offers direct subsidies to manufacturers.