India reportedly asks Tesla to up local sourcing, share plans for the country before any tax relief
Sputnik news agency and radio 09:46 GMT 13.08.2021
Earlier this year, the world's most valuable electric automaker Tesla registered a research and development wing in Bengaluru, India. The company has been scouting for suitable locations in the larger Indian cities to establish showrooms and service stations for its upmarket electric cars.
India's Ministries of Finance and Heavy Industries have asked Tesla to beef up local procurement, and submit a detailed report about its plans for the country, Bloomberg reported citing a source familiar with the matter.
The development comes after Tesla urged the Indian government to reduce import duties on electric vehicles.
In July, Tesla CEO Elon Musk revealed on Twitter that the company is eager to launch cars in India, however, the country's import duties on EVs are the "highest in the world by far".
Currently, under the Indian law, cars imported as completely built units (CBUs) attract customs duties ranging from 60 percent for vehicles priced below $40,000 to 100 percent for those above $40,000.
“We are hopeful that there will be at least a temporary tariff relief for electric vehicles,” Musk added.
As part of Tesla’s report on plans for India, the ministries have also asked the EV-maker to share its thoughts on importing completely manufactured cars versus the so-called knocked-down units or partially built vehicles, that attract a lower import levy.
Tesla’s response to the Indian government hasn't arrived yet
In April, federal Road Transport & Highways Minister Nitin Gadkari suggested that Musk should begin manufacturing Tesla cars in India, citing the "economic viability" of the idea.
While revealing that Tesla had already sources several auto components from India, Gadkari suggested that the sooner Musk launches his EV manufacturing in India, the better it will be for his company, because in the next two years India will have other brands competing with Tesla's standard offerings.
In a meeting with the Indian ministries earlier this month, Tesla claimed to have procured components worth $100 million so far from India while ensuring that the figure would increase following any tax concessions, the Bloomberg report noted.
The company has also promised to invest significantly to boost sales, services and EV-charging solutions in the fertile market of India, the second-most populous nation in the world, which constitutes Asia’s third largest economy after China and Japan.
According to the company's website, as of now, Musk plans to bring only one car to the Indian market - Tesla's Model 3 Standard Range Plus - priced at $36,990 (INR 2.7 million).
