India may mull incentives for Tesla if carmaker agrees to produce locally

THE Indian government may consider to lower import duty and offer other incentives to Tesla if it agrees to manufacture its cars in the country, the Economic Times reported.

Earlier, Tesla had approached the government to seek reduction in customs duty saying these cars should not be treated as luxury automobiles.

"We will be open to consider, especially if they will set up a manufacturing place here," the newspaper quoted an official in the report.

To boost electric vehicle production in the country, the government has offered several tax benefits such as a reduction in goods and services tax (GST) on electric vehicles to 5 per cent from 12 per cent, a cut in tax on chargers and charging stations to 5 per cent from 18 per cent.

For consumers, the government has announced a reduction in income tax of Rs 150,000 (£1,453) on interest paid on purchase of electric vehicles.

Meanwhile, the government is in talks with global companies to set up manufacturing facilities in India.