India on Tesla’s radar to set up manufacturing base

New Delhi, June 22 (KNN) Tesla and SpaceX CEO Elon Musk on Wednesday said that Tesla could soon be setting up a manufacturing base in India.

After a meeting with the Indian Prime Minister Narendra Modi in New York, Musk said Tesla will be in India “as soon as humanly possible”, changing stance from about a year ago when the carmaker had said that the levies imposed by India on automobiles are the highest among large countries and that it can only consider setting up a factory locally if it succeeds with imported models.

“The initial round of discussion has taken place with executives from Tesla recently. Talks are at a preliminary stage. “Wherever Tesla sets ups a base, it does so with its entire supplier base. So the investments are significant,” senior government officials told ET.

Tesla had registered an Indian arm, Tesla Motors India and Energy, in Bengaluru in January 2021, indicating that it was set to launch vehicles in the country.

Musk had, at the time, said his company is facing a lot of challenges and working with the government to launch operations in India. Talks, however, reached an impasse with the Indian government urging the company to submit firm business plans to manufacture electric cars indigenously instead of asking for an outright cut in customs duties.

An outright cut in import duties, the government apprehends, will result in the import of electric cars instead of companies setting up manufacturing facilities in India. This in turn will have an adverse impact on the kind of investments that lead to employment generation in the country.

At present, India imposes 100 per cent import duty on cars with cost, insurance and freight value of more than USD 40,000 and 60 per cent on cheaper vehicles.  (KNN Bureau)