NEW DELHI: India is pulling out all the stops to get Elon Musk’s Tesla to the country with government departments working to provide all the required approvals by January 2024.
The Prime Minister’s Office Monday held a meeting with top officials to take stock of the next phase of electric vehicle (EV) manufacturing in the country, including Tesla’s investment proposal, people with knowledge of the matter told ET.
“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,” a top official said.
The ministries of commerce and industry, heavy industry, and electronics and IT have been in discussions about the electric carmaker’s plans after Tesla CEO Elon Musk met Prime Minister Narendra Modi in the US during his state visit in June. Notably, India has invited US President Joe Biden to be the chief guest for the Republic Day celebrations on January 26.
Senior Tesla executives have discussed with the government plans to set up car and battery manufacturing facilities in India. The EV maker has expressed interest in bringing its supply chain ecosystem to India.
“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,” a second official said.
Tesla had earlier sought 40% import duty on fully assembled electric cars against the current rate of 60% applicable on vehicles priced below $40,000 and 100% on those retailed above that.
India’s customs duty regime does not differentiate between electric cars and those that run on hydrocarbons and imposes high duties to encourage local manufacturing. The company wants its cars to be treated as electric vehicles and not luxury cars.
The high duty has been a sticking point between Tesla and the Indian government with the US-based EV maker wanting to sell some cars in the country first before setting up a manufacturing unit.
“A new category may be introduced in the import policy to ensure that clean energy driven vehicles are taxed lower,” said the first official cited, while insisting that this incentive will not be “just for Tesla but for anyone committing to set up electric vehicle manufacturing units”.
Tesla had dropped its earlier India plans after failing to make headway in talks over import duty reduction. New Delhi had insisted on a commitment to local manufacturing in lieu of any import duty concession.
The government had also asked the company to apply for the production-linked incentive scheme that offers direct subsidies to manufacturers instead of seeking customs duty concessions.
Source: The Economic Times