Tesla-India talks set to gather momentum, PM Modi to meet Elon Musk in US

World's largest electric vehicle manufacturer Tesla's India launch could soon be a reality. Prime Minister Narendra Modi's ongoing visit to the United States is expected to further the process as he is scheduled to meet Tesla CEO Elon Musk on the sidelines. The meeting between the two, the second time in recent years, assumed significance after a team of executives from the EV manufacturer recently met with Indian officials in an attempt to reopen talks of investment. In May, Tesla reportedly offered to set up a manufacturing facility in India, its second in Asia after China, during the recent talks.

According to reports, the US-based electric car manufacturer wants to assemble its electric vehicles in India. In its efforts to reduce dependency on China, Tesla is looking for fresh avenues in Asia. A team of its executives were in New Delhi last month, reportedly offering to set up a local vendor base here. Tesla currently uses its vendor base in China, which is the EV maker's biggest market outside its home base. Tesla will require to relocate vendors if and when it decides to start manufacturing in India.

Tesla also reportedly has offered to set up a manufacturing facility in India. Though there has been no official confirmation, Elon Musk had said the location of Tesla's new factory in Asia outside China is likely to be finalised before the end of this year. He had also hinted that the facility could be located in India. Union Minister Rajeev Chandrasekhar had earlier said, “They are very seriously looking at India as a production and innovation base."

Tesla's renewed interest in setting up business in India is seen as a departure from its stand which looked at reduced import duties. The previous talks between the EV maker and the Centre ended in a deadlock when the government refused to entertain Tesla's request to reduce import duties before it started to sell its electric cars like Model 3 and Model S in India. Centre had advised Tesla to set up a local manufacturing plant if it wanted to sell EVs here. Union Minister Nitin Gadkari had said Tesla will be welcome to India if it manufactures EVs locally and not import them from China.