India not considering tax waivers for Tesla, says senior official

By India Today Business Desk: The finance ministry has firmly stated that it is not contemplating any duty waivers for the electric vehicle maker, Tesla Inc, reported news agency Reuters.

This information was confirmed by Revenue Secretary Sanjay Malhotra.

Previously, there have been discussions between Tesla and the Indian government regarding potential customs duty waivers for the import of Tesla’s electric vehicles into India.

Also Read | Tesla in talks to set up India factory, cars’ starting price Rs 20 lakh: Report

However, these proposals were not accepted by the Indian authorities. As per Malhotra, the Department of Revenue is currently not actively considering any such duty waiver for Tesla.

This news comes in the wake of last month’s statement by Tesla CEO Elon Musk, who mentioned that the Indian Prime Minister, Narendra Modi, was encouraging the company to make a “significant investment” in India.

Also Read | Elon Musk heaps praise on Modi leadership, says Tesla in India soon

Musk also hinted that an announcement regarding this investment could be expected soon.

Despite the lack of tax incentives, Tesla has shown interest in the Indian market.

Tesla is actively engaging with the Indian government to establish a local factory. The strategic move aims to manufacture electric vehicles (EVs) in India, which would make them more affordable and potentially boost India’s emerging EV market.

The company plans to produce up to 5 lakh EVs annually, with prices starting at Rs 20 lakh.

If successful, this could significantly enhance Tesla’s competitive position in India’s nascent EV market. Furthermore, Tesla intends to use the proposed facility as an export base, similar to its operations in China.

However, the absence of duty waivers could pose a challenge to Tesla’s plans, as the high import taxes in India have previously deterred the company from entering the market.

Despite these hurdles, Tesla’s potential establishment of a local manufacturing presence in India could mark a significant milestone for the company and contribute to India’s industrial growth in the EV sector.