The Indian government is working to speed up the approvals for Elon Musk’s Tesla. They want to encourage electric cars and boost manufacturing in India through the ‘Make in India’ program. The government plans to make it easier for Tesla to start operating in the country by January 2024. In a recent meeting, top officials from the government and the Prime Minister’s office discussed making India a hub for electric vehicle manufacturing.
They focused on Tesla’s proposal to invest in building a facility for making batteries and cars in India. Different government departments, like Commerce and Industry, Electronics and Information Technology, and Heavy Industry, are working together to speed up the approval process for Tesla. Earlier this year, Elon Musk met with Prime Minister Narendra Modi in the US.
Tesla executives have shown interest in setting up a large manufacturing facility in India, including the whole supply chain system. The government has asked these departments to address any issues in the approval process, so Tesla can officially announce its plans in India by January 2024. One challenge is that Tesla wants a lower import duty of 40% for its fully assembled electric cars.
Currently, India imposes a 60% import duty on fully assembled cars priced below $40,000 and a hefty 100% duty for those priced higher. This is one reason why luxury cars are more expensive in India. The government might create a new category with lower taxes for electric vehicles, not just for Tesla but for any company setting up a manufacturing facility in the country. This could help promote electric vehicles and local manufacturing in India.
In conclusion, the Indian government’s efforts to expedite approvals for Tesla reflect a significant step toward promoting electric mobility and bolstering manufacturing under the ‘Make in India’ initiative. By streamlining processes and addressing challenges, such as import duties, the government aims to facilitate Tesla’s entry and encourage the growth of electric vehicle manufacturing in the country. The potential introduction of a new tax category for electric vehicles signals a broader commitment to sustainable practices. If successful, this initiative could pave the way for increased investment and innovation in India’s electric vehicle sector, benefitting both the economy and the environment.