Reports about the arrival of the world’s number one electric vehicle manufacturer Tesla in India and the demands they have placed before the government have been a topic of discussion for a few months. Tesla was mainly asking the central government to provide duty exemption for vehicles imported from abroad. It is indicated that this demand was opposed in the first stage, but finally it was given to Tesla.
According to reports, the government is willing to give a three-year exemption to import duties on electric cars priced above 30 lakh rupees ($36,000) imported into India. However, there are indications that this move was taken as a bank guarantee for an amount similar to the investment for setting up an electric vehicle plant in India. With this proposal of the government, it is expected that the arrival of Tesla in India will be faster.
According to India’s import duty policy, 100 percent import duty is levied on vehicles costing more than $40,000 including price, insurance and freight, and 60 percent duty on vehicles priced below that. However, it is estimated that Tesla is willing to invest two billion dollars if the duty is reduced to 15 percent for two years on imported vehicles.
The central government believes that the arrival of foreign auto manufacturers in India will strengthen the country’s auto market and create many job opportunities. In addition to this, the government also estimates that the price of electric vehicles will come down significantly as the vehicles start to be manufactured locally. It is considered that the deposit can be secured if concession is given on the basis of bank guarantee.
It was earlier reported that the import of Tesla’s vehicles to India would be allowed on the condition that the manufacturing of vehicles in India would start within two years. Therefore, there are indications that Tesla’s vehicles may arrive in 2024. It was earlier reported that Tesla’s representatives had met with the Prime Minister’s Office and based on this the decision to grant the duty waiver was taken.
Tesla has put forward options to enter the Indian market in 2021. The government was even considering making concessions in the first phase. However, domestic car manufacturers strongly opposed this move. Due to this, the concession was not considered and Tesla was invited to manufacture the vehicle in India. In this context, Tesla’s India entry was extended again.
It is reported that Tesla’s plant will be built in Gujarat. It is estimated that the company has decided to set up Tesla’s vehicle manufacturing plant in Gujarat considering the presence of the port. Tesla is coming with plans to assemble vehicles in India. It is indicated that Tesla abandoned the plan to import the vehicle completely from abroad due to high import duties.