Is Elon Musk-led Tesla Finally Coming To India On Promise Of Import Duty Cuts?

is elon musk-led tesla finally coming to india on promise of import duty cuts?

Elon Musk-owned EV car manufacturing company Tesla could soon make its debut in the Indian market. According to an ET report, the US car maker Tesla is almost at the end of finalising a policy that provides concessions on the import duties of electric cars exceeding Rs 30 lakh for 2-3 years.

The reduced import duties are likely to be offered in place of bank guarantees by Tesla for a proposed investment to build an electric vehicle factory in India, ET reported citing sources close to the matter.

Indian Import Duty Scenario

Currently, India imposes a 100 per cent import duty on cars with a cost, insurance, and freight value exceeding $40,000 (approximately Rs 33 lakh).

The US car manufacturer wanted to establish its presence in the Indian market, Tesla is expressing willingness to invest up to $2 billion. However, this commitment is contingent upon the Indian government offering a reduced import duty of 15 per cent on imported electric cars for the initial two years of operation, according to a report by ET.

Indian Automakers Stance

In response to the relaxation of import duties for Tesla, Indian automakers are adopting a cautious wait-and-watch approach before making any substantial moves.

While no formal objections have been communicated to the government, there are concerns within the industry that a reduction in import duty could provide an unfair advantage to Tesla. The American automaker has yet to finalise its investment plans in the country.

Local Players Already In The EV Game

In India, there are several players in EV manufacturing including auto majors like Tata Motors and M&M. New age startups also working on the long-range EV like Bangalore-based Pravaig, Ola and other players. Any major development in government policy will be crucial in shaping a competitive space for EVs in India.