Minister’s message to Elon Musk

Minister’s message to Elon Musk

Tesla CEO Elon Musk

In a clear message to Elon Musk’s Tesla, Nitin Gadkari, the Minister for road transport and highways, has said that the company will get “concessions only if it manufactures locally in India”.

“…But if you make it in China and want to sell in India, then there is no concession policy available,” he said, according to the Times of India.

Tesla is demanding concessions from the Indian government to help it sell its cars at a competitive price in the Indian market.

The Indian government is reportedly considering a policy framework aimed at high-end, technologically advanced vehicle manufacturers like Tesla. This framework is designed to promote domestic manufacturing, involving local sourcing, and entails a reduction in import duties on fully built units during the initial years, the Times of India reported.The plan entails a substantial reduction in import duties on electric vehicles, potentially as low as 15%, compared to the current peak of 100%. However, this reduction would be contingent upon carmakers committing to commence manufacturing operations in India, increasing local component sourcing, and providing bank guarantees to cover any defaults on their commitments, it reported.

The government is reportedly looking to seek firm commitments from companies to establish a supplier ecosystem, with the goal of sourcing approximately 20% of parts locally within the first two years, eventually increasing to 40% by the fourth year.The bank guarantees would correspond to the value of the import duty reductions provided to the companies for bringing in their vehicles at subsidized rates. This measure would serve as a safeguard should companies fail to meet their commitments regarding local manufacturing and investments, the report said.

The policy, if implemented, would provide a substantial advantage to companies like Tesla, BMW, and Audi, allowing them to enter the promising Indian market with their electric vehicles while test-marketing their imported models.

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