India’s Road Transport Minister Nitin Gadkari said he asked Tesla Inc. to avoid selling China-made cars in India ahead of the electric-vehicle maker’s expected entry into the South Asian nation.
Tesla should “make cars in India, sell in India and export from India,” and rely on local suppliers, Gadkari said at an India Today Conclave event on Friday. Tesla models in India will cost 3.5 million rupees ($46,671) each and the government will provide whatever help the U.S. carmaker needs to make a foray into the nation, he said as per SCMP.
The company in August received approval to make or import four models in India, according to a posting on the website of the nation’s ministry of road transport and highways. Tesla produces vehicles in factories in the U.S. and China, and is awaiting final approval for a new plant in Germany.
Tesla has urged the government to standardise EV pricing and remove the social welfare surcharge placed on them, claiming that it would help the country’s EV ecosystem without jeopardising local interests. Gadkari stated that he was in discussions with Tesla executives over the company’s desire for tax breaks.
The Indian government imposes a 100 per cent import duty on cars as completely built units (CBUs) attract customs duty ranging from 60-100 per cent. This depends on engine size and cost, insurance and freight value less or above $40,000. Such high duties are meant to protect domestic manufacturers.
Meanwhile, India is also trying to diversify its supply chains away from China, due to recent frictions caused by military clashes in the border regions last year. Recently, Gadkari had said Tesla has a golden opportunity to set up its manufacturing facility in India given the country’s thrust on e-vehicles. Tesla is already sourcing various auto components from Indian automakers and setting up base here would be economically viable for it, he had said.