India may see an early launch of Tesla electric cars as the central government departments are reportedly working diligently to provide all necessary approvals to the Elon Musk-promoted company to foray into the Indian market.
The approvals are likely to be in place by January 2024, the Economic Times (ET) reported, citing unnamed government sources.
The move comes in the wake of a high-level meeting at the Prime Minister’s Office on Monday, during which the next phase of electric vehicle (EV) manufacturing in the country, including Tesla’s investment proposal, was discussed, the report said.
While the meeting primarily focused on general policy matters, fast-tracking approvals for Tesla’s proposed investment in the country by January 2024 was reportedly a prominent agenda item.
The Ministries of Commerce and Industry, Heavy Industry, and Electronics and IT have been engaged in discussions about Tesla’s plans ever since CEO Elon Musk met with Prime Minister Narendra Modi during his state visit to the US in June.
Senior executives have reportedly been in talks with the Indian government to establish car and battery manufacturing facilities in India, with the EV manufacturer expressing a keen interest in bringing its supply chain ecosystem to the country.
EV manufacturer had previously sought a 40 percent import duty on fully assembled electric cars, as opposed to the existing rate of 60 percent for vehicles priced below $40,000 and 100 percent for those above this threshold.
India’s customs duty regime treats electric cars and hydrocarbon-powered vehicles alike, imposing high duties to encourage local manufacturing.
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The import policy reportedly may see the introduction of a new category to ensure lower taxation for clean energy-driven vehicles. This incentive would not be exclusive to Tesla but open to anyone committing to establishing electric vehicle manufacturing units.
Electric car producer had initially abandoned its plans for India due to challenges in negotiating import duty reductions.
The Indian government insisted on a commitment to local manufacturing in exchange for any import duty concessions.
The Indian government’s move comes amid reports about Tesla’s plans to produce a 25,000-euro car at its factory near Berlin.
This will mark a significant step for the electric vehicle manufacturer, which has long aimed for mass adoption of its cars.
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