Indian government refrains from providing tailor-made incentives to Tesla, the US electric car manufacturer, but states have the freedom to offer concessions. Tesla is showing interest in building a complete supply chain in India. Currently, imported cars as completely built units attract customs duties ranging from 60% to 100%.
According to sources, the Indian Union government is currently not considering providing tailor-made incentives to Tesla, the US-based electric vehicle manufacturer. However, individual states have the freedom to offer concessions to the company. Tesla has expressed a keen interest in India and has discussed the possibility of establishing a complete supply chain in the long term.
Representatives from Tesla visited India last month and held meetings with various government bodies, including the Ministry of Commerce and Industry. An official source mentioned that the government has clearly conveyed its preference for minimizing imports, while Tesla has expressed its ambition to establish comprehensive supply chains within the country.
Regarding the extension of incentives to Tesla, the sources stated that the government is not currently contemplating any specific incentives. However, they noted that states have autonomy in this matter and may compete with each other to provide concessions to the company. It is worth mentioning that in 2021, Tesla requested a reduction in import duties on electric vehicles (EVs) in India.
Currently, imported cars classified as completely built units (CBUs) attract customs duties ranging from 60% to 100%, depending on factors such as engine size and cost, insurance, and freight (CIF) value, specifically if it falls below or exceeds USD 40,000.
