The Indian Government is reportedly working to “fast-track” approvals for Tesla’s investment proposals as early as next year, according to local publication The Economic Times.
Policy change
According to the report, Indian officials evaluated a proposed policy change concerning the country’s electric vehicle production. As mentioned, Tesla’s previous proposal to invest in the local EV industry was among the main agenda of the discussion during the meeting hosted by the Office of the Prime Minister.
“Though the agenda of the meeting was centered on general policy matters, fast-tracking approvals by January 2024 to Tesla’s proposed investment in the country was [spelled] out.”
Indian Government Official
Unfortunately, the official did not elaborate on the details of the new policy. We will surely learn more once the government finalizes it.
Tesla’s demand
In hindsight, Tesla initially expressed interest in penetrating the Indian EV industry. However, its proposal to initially import its electric cars to “test demand” did not materialize as the country imposes high import duty on all vehicles.
As Teslarati noted, India charges a 60% import tax on sub-$40,000 vehicles and 100% on vehicles exceeding the given price cap.
In that sense, Tesla called for the government to lower the import duty for its EVs to at least 40%. However, Indian officials refused to approve Tesla’s proposal at that time, requiring the American EV giant to establish domestic production first.
Advancements
Finally, the Indian government seems to have given in to Tesla’s request to gain major investments in its electric vehicle industry.
The new policy can potentially pivot the long-standing negotiations between the Musk-led company and India. It can also address the major challenges Tesla considers in its proposed Indian investment.
“A new category may be introduced in the import policy to ensure that clean energy-driven vehicles are taxed lower.”
Indian Government Official
Apart from a potential Giga India, Tesla will also reportedly source EV parts from the country worth up to $1.9 million in 2023.
In effect, Tesla’s imminent presence in the Indian market will surely boost local EV production and sales. However, it must also be noted that the policy changes will not be exclusive to Tesla” but for anyone committing to set up electric vehicle manufacturing units.”
