Indian Commerce Minister Piyush Goyal will visit the United States next week to meet the Chief Executive Officer of the world’s most valuable automaker, Elon Musk.
The agenda of the meeting will reportedly revolve around Tesla’s investment proposals as the two parties seek to “iron out” potential agreements, Reuters reports, citing people familiar with the plans.
Report highlights
Tesla CEO Elon Musk and Minister Piyush Goyal apparently aim to accelerate investment prospects in the country’s flourishing electric vehicle industry.
The report noted that the upcoming business meeting will focus on the electric vehicle giant’s Gigafactory plans for the US$24,000 model. It will also include its proposals to source more vehicle parts and raw materials from the country and expand the nationwide charging network, one of the two sources revealed.
In addition, the meeting may also tackle the upcoming policy changes that will lower EV import taxes to 15%. It indicates a significant adjustment from the current import tariff of 60% for vehicles worth $40,000 or below and 100% for those exceeding the price cap.
Overall, the meeting reportedly aims to guarantee that the discussions between the two parties “are moving in the right direction.”
Notably, it will signify the most important meeting between the two parties following the recent one Tesla had with Prime Minister Narendra Modi in June 2023. In hindsight, the Tesla boss told the media at that time that he was highly interested in making significant investments in India, even asserting his appreciation for PM Modi.
Negotiations progress
In hindsight, Tesla initially attempted to penetrate the Indian market with its electric cars through import in 2021.
It requested India to lower the import tariff for its vehicles to at least 40%. However, the federal government refused to grant the demand as it wanted the American automaker to build a local production factory first.
According to Teslarati, the high import tax has been the top barrier in the potential partnership between Tesla and the world’s most populous country.
Finally, the two parties seem to start to find their common ground. EV-a2z recently reported that India now plans to accelerate approvals for Tesla’s project proposals as early as next year.
Significance
The imminent meeting between Minister Piyush Goyal and Tesla Chief Elon Musk may substantially accelerate the American EV giant’s entry into India.
Once the proposed tax reduction gets approval, it will enable Tesla to accurately test customer demand in the country. In effect, it may prompt Tesla to finally establish a domestic production factory.
It is also worth noting that Tesla’s potential entry into the Indian market will significantly aid the country’s green goals of reducing carbon emissions by 45% from 2005 levels by 2030, which was announced at the COP26 summit in Glasgow. It also aims to reach its net-zero emissions target by 2070.
