This story was first published on the Benzinga India portal.
India is accelerating its efforts to roll out the red carpet for Elon Musk's Tesla TSLA. The government departments are working vigorously to grant essential approvals by January 2024. As per a media report, a vital meeting, steered by the Indian Prime Minister's Office, focused on hastening Tesla's investment proposal to expedite the electric vehicle (EV) titan's entry into the Indian market.
According to an Economic Times report, the meeting, primarily focused on EV policy, underscored the need to speed up processes for Tesla. This was confirmed by a senior official. The commerce and industry, heavy industry, and electronics and IT ministries are actively participating in discussions following Musk's meeting with Indian Prime Minister Narendra Modi in the U.S.
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Tesla’s top brass has presented their plan to establish car and battery production bases in India. They view the nation not just as a market but also as a potential hub for their global supply chain. Officials are encouraging the government to smooth out any issues with Tesla to hasten the announcement of its manufacturing plans.
In the past, Tesla had campaigned for a reduced import duty of 40% on completely built EVs. This is in opposition to the existing tariffs of 60% for vehicles under $40,000 and 100% for those priced higher. India’s existing customs framework does not differentiate between EVs and conventional fuel vehicles, maintaining high duties to promote domestic production. Tesla has lobbied for its cars to be categorized under a new, favorable EV classification, not as luxury imports.
The deadlock over duties had halted Tesla’s initial entry into India, with the government insisting on a local manufacturing commitment before any duty relief. Officials also pointed Tesla to the production-linked incentive scheme, which offers subsidies to manufacturers, as an alternative to customs duty reductions.
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