India is leaving no stone unturned to welcome Elon Musk and Tesla, with government departments reportedly working to secure all necessary approvals for the automaker as soon as January 2024.
According to a report from The Economic Times, the Prime Minister’s Office convened a meeting with high-ranking officials on Monday to assess the next phase of electric vehicle (EV) manufacturing in the country. While the meeting’s primary agenda revolved around general policy discussions, a prominent topic of the discussion was Tesla’s investment proposal, with a top official revealing that a clear objective was set – expediting approvals for Tesla’s proposed investment by January 2024.
The report says several key ministries, including commerce and industry, heavy industry, and electronics and IT, have been engaged in discussions concerning Tesla’s plans. Ministries and government departments have been tasked with resolving any differences with Tesla to facilitate the announcement of Tesla’s manufacturing plans in India as soon as possible.
Senior Tesla executives have held dialogues with the Indian government about the building car and battery manufacturing facilities in India. Tesla also expressed interest in bringing its supply chain ecosystem to India.
Last year it looked like Tesla was never going to enter the Indian market. The biggest hurdle for Tesla was the country’s customs duty regime, which imposes high duties on imported vehicles. The automaker petitioned the government to reduce the import duties, but the government would not budge, saying Tesla would first need to commit to building a factory in the country before it would consider doing so. The current import duty for vehicles below $40,000 is 60%, while cars priced above $40,000 face a 100% import duty.
To address this issue, officials are contemplating the introduction of a new import policy category to lower taxes on clean energy-driven vehicles, providing an incentive not only to Tesla but to any company committed to establishing electric vehicle manufacturing units in India.
“A new category may be introduced in the import policy to ensure that clean energy driven vehicles are taxed lower,” said an official.
This progress between Tesla and India follows a meeting between CEO Elon Musk and Prime Minister Narendra Modi in June, after which Musk said Tesla would make a significant investment in India “as soon as humanly possible.”