If Tesla wants the Indian government to consider lowering their extremely high import taxes on electric vehicles (EV), they will need to set up a local manufacturing facility in the country first.
That message was recently relayed to the California automaker by the Heavy Industries Ministry in India, according to multiple government sources who spoke to the Times of India.
The government reportedly said if they were to provide the concessions to Tesla, it would send a bad signal to other companies who have already invested billions to manufacture their vehicles domestically.
This is just the latest twist and turn in the saga that is Tesla’s attempt to enter the Indian EV market.
Earlier this summer Tesla sent a letter to the government asking them to reduce import duties on EVs. Currently India charges a 60% import tax on vehicles costing $40,000 or less. For vehicles over $40,000, the import tax is 100%.
Tesla, along with other automakers, asked for the duties to be reduced from 60% down to 40% and 100% down to 60%.
The government’s latest request comes after they requested to see how Tesla plans to do business in the country before committing to any tax cuts.