Weeks after it emerged that US electric car maker Tesla has written to the Central government to ease the import duty on vehicles, India has reportedly asked the company to ramp up local procurement and share detailed manufacturing plans. It seems New Delhi has sought Tesla's plans for India before the carmaker's demands for lower taxes on electric vehicles are considered, Bloomberg reported citing a person with knowledge of the matter.
The ministries of heavy industries and finance sought the details from Tesla in a meeting earlier this month, the report said. The departments have also asked Tesla for its thoughts on importing fully built cars versus so-called knocked-down units or partially built vehicles, which attract a lower import levy.
At the meeting, Tesla claimed it has procured components worth $100 million so far from India and suggested that figure would increase following any tax concessions. The company also pledged to make significant direct investments in sales, service, and charging infrastructure and evaluate broader investments in manufacturing once it enters the world's second-most populous nation.
Close on the heels of Tesla writing to the Indian government, Tesla founder and CEO Elon Musk had stated that the high import duty levied by India, the highest in the world, is the reason for the company's delayed launch plans in India.
Many luxury vehicles have also lobbied the government in the past to lower taxes on imported cars but have had little success due to opposition from rivals with domestic operations. Passenger four-wheelers imported into India are currently taxed at 60 per cent for vehicles costing below $40,000, or at 100 per cent for vehicles with prices above $40,000, irrespective of the fuel type. In a letter to the Indian authorities, Tesla had lobbied a reduction of the customs duty to 40 per cent for EVs.
