Tesla won't get any special treatment in India, confirms govt official

  • Tesla has demanded a tax rebate for importing its electric cars in India, which was rejected by the Indian government.
Tesla has demanded a tax rebate for importing its electric cars in India, which was rejected by the Indian government. (REUTERS)
Tesla has demanded a tax rebate for importing its electric cars in India, which was rejected by the Indian government.

Despite its interest to set up business officially in India, Tesla will not receive any special treatment in the country, a government official has confirmed to PTI. The report has quoted the government saying that there will be no special policy for the US electric car major. However, it can seek incentives under the existing schemes like Production Linked Incentive (PLI) schemes for auto and advanced chemistry cells, just like other EV manufacturers.

Tesla has been expressing its interest to sell its cars officially in India for quite some time. However, the American EV major has been seeking a special policy from the Indian government that would allow it to import cars to the country at a lower tax rate. However, the Indian government has made it clear that it will not giveTesla a tax rebate. Instead, the Indian government wants Tesla to set up its production base in the country and locally manufacture the electric cars to avail of lower tax benefits. However, Tesla has not revealed any concrete plan to set up a manufacturing facility here.

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In 2021, Tesla demanded a reduction in import duties on electric vehicles in India. However, the government of India rejected that. The representatives of Tesla visited the country last month to meet officials of various ministries, including the Commerce and Industry Ministry. This fuelled speculation of Tesla coming to India finally. Later Tesla CEO Elon Musk met Prime Minister Narendra Modi last month in New York. After the meeting, Musk said he plans to visit India in 2024. "I am confident that Tesla will be in India, and we will do so as soon as humanly possible," Musk had said after that meeting.

Speaking about the possibility of curating any special policy for Tesla, the government officials reportedly said that the rule will be the same for all the companies and there will be no special treatment for the US auto major. "We have told Tesla that the policies, which are already there for all, they can also apply under that PLI. They are welcome. Generally, the policy will be the same for all. For a single company, the government may not like to make separate policies. So far, there is no plan to give special treatment," the official reportedly said. The government official reportedly also said that representatives of Tesla's biggest battery supplier Panasonic have met them and they have stated that the South Korean company wants to make batteries in India. “We have suggested them to apply under PLI ACC batteries," the official added.

The Indian government rolled out the production-linked incentives (PLI) schemes (PLI) for advanced chemistry cell (ACC) battery storage with an outlay of 18,100 crore and 26,058 crore PLI scheme for auto, auto-components and drone industries a couple of years back in an attempt to boost local manufacturing in the country. The government last week announced the re-bidding of PLI for 20 GWh advanced chemistry cell manufacturing.

First Published Date: 23 Jul 2023, 13:43 PM IST

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