While Tesla, the US-based electric car manufacturer, has shown renewed interest in entering the Indian market, the Union government is reportedly not inclined to offer any special incentives to the carmaker at present. According to sources cited by ET, the Centre is not keen on making accommodations for the world’s highest-valued carmaker, but the states are free to provide concessions to enhance competitiveness.

Government sources indicated that tailored incentives are not being considered currently, although states may choose to compete with each other by offering concessions. Tesla has expressed its intention to build a complete supply chain in the long run, similar to what Apple has done recently.

Tesla executives visited India in mid-May to explore potential market entry. They met with various relevant departments, including officials from the heavy industries and commerce ministries. The Indian government has made it clear that it does not prefer imports, although Tesla has expressed ambitions for complete supply chains through India.

Over the years, Tesla and the Indian government have been at odds. In 2021, Tesla requested a reduction in import duties on electric vehicles (EVs), but the government promptly denied the request. CEO Elon Musk has also criticized the high import duties on EVs in India. He urged the government to lower the taxes, which currently range from 60% to 100% based on the Cost, Insurance, and Freight (CIF) value of fully imported cars.

Although Tesla has shown increasing interest in the Indian market since May, talks have been more focused on manufacturing in India, as the Centre prefers domestic production over imports. Tesla is reportedly “serious” about setting up production and an innovation center in the country. During the meeting with Tesla, the Indian government signaled its willingness to offer facilities to support the carmaker’s ambitions in India.

In addition to plans for a manufacturing plant, Elon Musk is also considering local procurement of components. Tesla has discussed incentives for car and battery manufacturing, among other topics. Currently, the government is waiting for Tesla to provide a roadmap for establishing a manufacturing facility in India.

While Tesla, the US-based electric car manufacturer, has shown renewed interest in entering the Indian market, the Union government is reportedly not inclined to offer any special incentives to the carmaker at present. According to sources cited by ET, the Centre is not keen on making accommodations for the world’s highest-valued carmaker, but the states are free to provide concessions to enhance competitiveness.

Government sources indicated that tailored incentives are not being considered currently, although states may choose to compete with each other by offering concessions. Tesla has expressed its intention to build a complete supply chain in the long run, similar to what Apple has done recently.

Tesla executives visited India in mid-May to explore potential market entry. They met with various relevant departments, including officials from the heavy industries and commerce ministries. The Indian government has made it clear that it does not prefer imports, although Tesla has expressed ambitions for complete supply chains through India.

Over the years, Tesla and the Indian government have been at odds. In 2021, Tesla requested a reduction in import duties on electric vehicles (EVs), but the government promptly denied the request. CEO Elon Musk has also criticized the high import duties on EVs in India. He urged the government to lower the taxes, which currently range from 60% to 100% based on the Cost, Insurance, and Freight (CIF) value of fully imported cars.

Although Tesla has shown increasing interest in the Indian market since May, talks have been more focused on manufacturing in India, as the Centre prefers domestic production over imports. Tesla is reportedly “serious” about setting up production and an innovation center in the country. During the meeting with Tesla, the Indian government signaled its willingness to offer facilities to support the carmaker’s ambitions in India.

In addition to plans for a manufacturing plant, Elon Musk is also considering local procurement of components. Tesla has discussed incentives for car and battery manufacturing, among other topics. Currently, the government is waiting for Tesla to provide a roadmap for establishing a manufacturing facility in India.