India asks Tesla to make cars in India, assures full support

INDIAN transport minister Nitin Gadkari has said that US electric car-maker Tesla had been asked not to sell its China-make vehicles in India and instead make them in the South Asian country.

He also reportedly asked Elon Musk’s firm to export its cars made in India product.

The minister said: “I have told Tesla not to sell China-made electric cars in India. You should manufacture electric cars in India, and also export cars from India.”

He added that Tesla has been assured of all necessary support from the Indian government.

Tesla has been seeking a reduction of import duties in India, Musk has said on Twitter that his company’s plans to bring electric vehicles to India were hampered by the country’s high import duties.

“We want to do so, but import duties are the highest in the world by far of any large country!” he said.

The Indian government levies a 100 per cent import duty on cars. Completely built units (CBUs) attract customs duty ranging between 60 to 100 per cent, depending on the engine size and cost, insurance and freight value less or more of $40,000 (£29,382).

The government charges the duties to protect the country’s domestic manufacturers and its stance has remained unchanged so far despite Musk’s appeal.

Tesla also told India’s road ministry that the effective import tariff of 110 per cent on vehicles with customs value of more than $40,000 was “prohibitive” to zero-emission vehicles.

Musk had also said that India treated clean-energy vehicles the same way as those run in diesel and petrol and called the stance inconsistent with its climate goals.

Tesla advised the Indian government to standardise tariffs on electric vehicles and scrap the social welfare surcharge levied on them. According to the company, such a move would facilitate India’s electric vehicle ecosystem without hurting the domestic makers.

Gadkari said he was holding talks with Tesla officials over their demand related to tax concessions. In September, he had asked the car-maker to begin manufacturing in India before consideration of any tax concession.

He also said that the Indian government is eyeing for 30 per cent electric vehicle sales penetration for private purchases, about 70 per cent for commercial purchases and 80 per cent for two- and three-wheelers by 2030. He added that there is an urgent need to decarbonise the transport sector.

The Indian minister also said that Tesla cars will be launched in India at a price of around Rs 3.5 million (£34,219).