New Delhi: The central government is unwilling to give Tesla any break without a commitment to build locally. Reuters quoted sources as saying that talks between the two sides, the government and Tesla Inc., have reached an impasse over potential tax benefits.
Tesla is desperate to import and sell its electric vehicles in India and has lobbied authorities in New Delhi for nearly a year to lower tariffs, which the company’s billionaire CEO Elon Musk says are among the highest in the world. .
But Indian official sources said they are unconvinced of Tesla’s lobbying as the company has yet to share any concrete plans to invest in the country, something that is in line with Prime Minister Narendra Modi’s ‘Make in India’ initiative to boost local manufacturing. India’ vision. create jobs.
A third person with direct knowledge of Tesla’s thinking said talks with the government had reached a “strange standoff”. “Things are not progressing (for Tesla),” the Reuters source said. The sources declined to be identified as the discussions are private.
The apparent impasse could upset the electric carmaker’s ambitions for the South Asian country as it was hoping at lower import taxes to make its cars more affordable and business viable.
Currently, India imposes an import tax of up to 100 percent on electric vehicles whose so-called landing cost, car cost and inbound shipping charges, are $40,000 or more.
This would make India the most expensive market for Tesla cars in the world, making them out of reach for most Indian consumers.
A third source said Tesla has told officials it is open to sourcing more auto components locally and eventually moving to manufacturing, but government sources have indicated they want a firmer commitment.
“If they don’t want to invest anything here, how will this model work,” said a senior government official.
Tesla did not respond to a request for comment.
The prime minister’s office and the ministries of finance and industry, all of which are reviewing Tesla’s demands, did not respond to a request for comment.
Tesla, however, pinned its hopes on the upcoming Union Budget on February 1, when such tax changes are generally announced, to see if its lobbying yields results, or reconsidered. Find out how it wants to reach the Indian market, a third source and a fourth person spoke about the company’s plans.
A fourth source said that in its latest effort, Tesla recently met officials from India’s tax and customs department. It previously met with Modi’s office and sought Musk’s meeting with the prime minister to discuss his plans for India.
The government has in the past taken a tough stand against demands from foreign companies as it focused on promoting local production. In 2017, Apple sought tax concessions, including lower import duties, to make iPhones locally, but many of its demands were rejected by Modi’s officials.
Musk had earlier said on Twitter that if Tesla is successful in selling imported cars, it may consider manufacturing cars in India. He tweeted last week that the company “still faces a lot of challenges with the government.”
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