On Friday, at the Indian Today Conclave 2021, Union Minister Nitin Gadkari said, “I have told Tesla that don’t sell electric cars in India which your company has manufactured in China. You should manufacture electric cars in India, and also export cars from India,” and mentioned that Tesla had been assured of all necessary support from the Indian government.
The Indian government, with the aim of protecting the domestic manufacturers, imposes a 100 percent import duty for completely built units. Based on the cost, engine size, insurance and CIF value above or less than USD 40,000 the import duties for CBU ranges around 60–100 percent.
Tesla has also demanded a reduction in import duties on EVs in India. It has firmly stated in a letter to the Road Ministry that the effective import tariff of 110 per cent with customs value above USD 40,000 is “prohibitive” to zero-emission vehicles. It has also put in a request to bring the import tariff down to 40 percent and remove the 10 percent social welfare surcharge on electric cars.
Their argument is that since no Indian OEM is in production of EVs currently that cost above USD 40,000 ex-factory price, their proposals would not impact the Indian automotive industry negatively.
It should also be noted that Tesla CEO Elon Musk had previously taken his thoughts about this to Twitter in 2019, saying that Tesla is hindered by the high import duties for their electric vehicles to be made affordable in the Indian market.
Gadkari, whereas, standing strongly in his stance, was noted saying last month that since Tesla was already sourcing various components from Indian makers, having its manufacturing base here in India would only be economically viable for it.
We will see in the near future if Tesla takes up the Indian government’s offer as it looks to offer affordable EVs in larger markets like India with a view of enhancing their sales and green energy consumption.