In September 2021, the heavy industries ministry had also asked Tesla to first begin its manufacturing business in India prior to any tax concessions consideration.

Public policy ‘think tank’ of the government of India, Niti Aayog’s Vice Chairman Rajiv Kumar on October 21, 2021, urged American vehicle manufacturer Tesla to manufacture its electric vehicles in India. The US-based company is assured to get the tax benefits it wants from the government.

At a virtual conference of the PAFI (Public Affairs Forum of India), Kumar said Tesla should not just ship its products into India since it does not create any employment opportunities in the country. He further said the argument that the government would create a market by exporting finished products into India was an “old argument” and they have moved on from that.

The government of India is making constant efforts to convince the US-based company to manufacture EVs (Electric Vehicles) in India. On October 8, 2021, Minister of Road Transport and Highways in India, Nitin Gadkari had also revealed that he had approached Tesla several times to manufacture its EVs in India, while assuring the company will get all the benefits and support from the government.

Gadkari also said Tesla holds a golden opportunity to establish its manufacturing unit in India, considering the country’s thrust on electric vehicles. He further said in this regard that since the company already sources various auto components from automakers in India, setting up a manufacturing facility would be economically feasible for it.

In September 2021, the heavy industries ministry had also asked Tesla to first begin its manufacturing business in India prior to any tax concessions consideration. 

Currently, cars which are imported as CBUs (completely built units) tend to attract customs duty ranging from 60 to 100 per cent, depending on factors such as engine size, its cost, insurance as well as freight value less or more than $40,000.

The Elon Musk-led establishment stated via a letter sent to the road ministry, that the effective import tariff of 110 per cent on vehicles with customs value above $40,000 is prohibitive in the regard of zero-emission vehicles. 

Requesting the Indian government, Tesla has asked to standardize the tariff on electric cars to about 40 per cent irrespective of its custom value, also to withdraw the surcharge of social welfare of 10 per cent on electric cars.

American vehicle manufacturer has shared that these changes will perhaps spur the development of the Indian EV ecosystem and the company will boost its investment directly in sales, service and charging space. In addition, the company will augment procurement from India for its global operations. 

(PTI)