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Indian government asks Tesla about its Indian operation’s blueprint before reviewing import charges

Sources claim that a meeting has been held between government officials and Tesla representatives to find a middle ground on the matter.

Last week we got reports that the Indian Government is ready to consider Tesla’s import duty reduction on electric vehicles if its operations will benefit India’s domestic economy. Now, there’s been further development in the matter, and sources claim that Indian officials have asked Tesla Inc. to ramp up local procurement and share detailed manufacturing plans before the automaker’s demands for lower taxes on electric vehicles are considered.

The ministries of heavy industries and finance sought the details from Tesla in a meeting earlier this month, even as the government examines its billionaire CEO, Elon Musk’s demand for lower taxes on EVs in Asia’s third-largest economy. The departments have also asked Tesla for its thoughts on importing fully built cars versus so-called knocked-down units or partially built vehicles, which attract a lower import levy, the source further informed.

As per the source, during the meeting, Tesla claimed it has procured components worth $100 million so far from India and suggested that figure would increase following any tax concessions. Tesla also pledged to make significant direct investments in sales, service, and charging infrastructure and evaluate broader investments in manufacturing once it enters the world’s second-most populous nation.

However, the source didn’t reveal his identity as the talks are private and still in the initial stage. Neither Tesla nor any government officials have also given any official statements on the matter yet. Last month the California-based EV manufacturer wrote to the Indian government asking for the import duty on electric cars to be reduced to 40% from the current 60% to 100%. The company also asked for the exemption of a 10% social welfare surcharge, which is levied on all imported cars and helps fund health and education programs.

Elon Musk has for several years showed his willingness to enter one of the world’s most-promising automobile markets, but complained in a tweet thread last month that high taxes are proving to be a hindrance in the way of Tesla’s India operations.

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Himanshu Harsh

My love for automobiles is what fuels my writing. You can catch me twisting synth knobs when I'm not drooling over cars.

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