New EV policy in works, talks on with global carmakers: Official

Even as top executives of Tesla are meeting up with Indian government officials to discuss its foray into the country, the US-based electric vehicle manufacturer has picked up office space in Punes Viman Nagar locality. The companys India arm, Tesla India Motor & Energy, has leased the office spread over 5,850 sq ft in a coworking center on the first floor of one of the towers in Panchshil Business Park.

The electric carmaker's renewed interest in India comes nearly a year after it put on hold plans to sell cars in the country after failing to secure lower import taxes, which its CEO Elon Musk said are among the highest in the world.

Senior government officials in the know told ET that Tesla has sought provisional tariff concessions as a prerequisite for setting up a manufacturing facility in India, but New Delhi is not in favour of any company-specific exemptions.

Elon Musk's Tesla is likely to enter the Indian market next year, as the Prime Minister's Office directs relevant departments to expedite Tesla's investment plans by January 2024. This move marks a significant development for India's automotive sector, the world's third-largest market. Tesla's entry will initially involve fully built-up car imports, sparking discussions about potential advantages from lower import duties for the American company compared to domestic electric car manufacturers.

India is closing in on an agreement with Tesla Inc. that would allow the US automaker to ship its electric cars to the country from next year and set up a factory within two years, according to people familiar with the Indian government’s thinking.

India Business News: India is working towards expediting the necessary approvals for Tesla's investment proposal by January 2024. The government is making concerted effort

India's combined sales and additional taxes on hybrid vehicles sales are as high as 43%, based on the size of the car, compared with the highest rate of 50% imposed on petrol and diesel cars. India taxes electric vehicles (EVs) at just 5%. The move could boost the prospects in India of Japan's Toyota Motor, the world's largest carmaker, which has been lobbying for months for lower taxes for hybrid cars, arguing such vehicles are far less polluting than petrol cars.

According to sources aware of the matter, Tesla has approached the union government with a detailed proposal linking the quantum of investment to the number of cars it can import at lower duty. The company is willing to invest up to $500 million if the government extends concessional tariff for 12,000 vehicles and can increase this up to $2 billion if the reduced duty is approved for 30,000 vehicles.