Tesla asked to make cars in India

INDIA’S transport minister Nitin Gadkari said that US electric car-maker Tesla had been asked not to sell its China-manufactured vehicles in India and instead make them in the south Asian country.

Gadkari also reportedly asked Elon Musk’s firm to export its cars that are made in India.

The minister said last Friday (8), “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.”

The firm has been seeking a reduction of import duties in India. Musk had said on Twitter that his company’s plans to bring electric vehicles (EV) to India were hampered by the country’s 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 per cent and 100 per cent, depending on the engine size and cost, insurance and freight value less or more of $40,000 (£29,382).

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

Tesla told India’s road ministry 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 also said India treated clean-energy vehicles the same way as those run on diesel and petrol, and called the stance inconsistent with its climate goals.

The company had asked the government to standardise tariffs on EVs and withdraw the social welfare surcharge levied on them, insisting that it would benefit the EV ecosystem in the country without damaging domestic interest.

Gadkari said he was holding talks with Tesla officials over their demand related to tax breaks. In September, the minister asked the car-maker to begin manufacturing in India before any tax concessions would be considered.