The Indian Government has finally addressed ongoing concerns over its possible special treatment of Tesla as senior officials told ET about New Delhi’s refusal to offer any company-specific exemptions.
Government officials promote equality
According to the report, India intends to provide equal and fair incentives for both local and foreign brands that plan to invest in domestic electric vehicle production.
This clarification from the officials is crucial for its ambitious electrification plans as its local automakers have been increasingly concerned over potential concessions in import tariffs to the world’s most valuable automaker.
“The government’s approach is for the industry as a whole and not for any specific company because we have very strong domestic companies in this sector.”
Indian Government Official
Tesla’s conditions
As EV-a2z previously reported, Tesla calls for the Indian Government to reduce import tariffs on its electric vehicles to at least 40% from the current 60%-100%. It is a crucial prerequisite of the Musk-led company for establishing a local production factory in India.
In response, India decided to begin developing a new policy to finally adhere to Tesla’s request, as noted by Business Outlook India. Considering the officials’ anti-favoritism approach, the country will undoubtedly attract more investments from other foreign brands. It will also alleviate local brands’ concerns over Tesla’s potential advantage.
In hindsight, Commerce and Industry Minister Piyush Goyal recently visited Tesla’s Fremont factory during his trip to San Franciso for the third Indo-Pacific Economic Framework. However, he clarified that they have yet to agree on a final decision regarding Tesla’s penetration in the country’s EV industry.
Local brands’ concerns
Local automakers worry that concessional tariffs to Tesla will significantly impede their current and future investments in electric vehicle production.
The report cited an unnamed Senior Industry Executive’s remarks that some automakers fear a potential unfair advantage to Tesla, which could leave them behind in the race.
These apparently include legacy automakers like Tata Motors and Mahindra & Mahindra. It also involves other companies that have already invested in the country’s domestic EV production, like Maruti Suzuki and Hyundai–Kia.
According to ElectronicsB2B.com, Indian officials are still discussing the investment thresholds for electric automakers to benefit from the new local production promotion initiative. That said, local automakers and other foreign brands with plans to invest in India do not have to worry any more over Tesla’s potential unfair advantage in the future.
However, India’s notable interest in a local Tesla Gigafactory is undoubtedly crucial for its electrification strategy. The Musk-led company can offer the country unprecedented production prowess and innovative electric vehicles.
