PM Modi’s office directs ministries to clear Tesla proposals by January: Report
American billionaire Elon Musk with Indian PM Narendra Modi
India's Prime Minister Office (PMO) led by Narendra Modi has reportedly directed concerned governmental departments to fast-track pending investment proposals by Tesla, the American EV auto giant owned by billionaire Elon Musk, by January 2024.
According to a report by the Economic Times, the PMO recently held meetings regarding the next phase of electric vehicle manufacturing in India, in which Tesla's pending investment proposal was also discussed.
The report quoted a senior government official as saying that the PMO emphasised the need to expedite Tesla's proposed investments in India.
Following PMO's intervention, ministries, including commerce and industry, heavy industry, and electronics and IT, are likely to prioritise their engagements with Tesla officials.
The decision comes after the June 2023 meeting between PM Modi and Musk. It also comes before US President Joe Biden’s potential visit to India as he has been invited to attend India’s Republic Day celebrations on January 26.
Point of contention between Tesla and India
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According to reports, Tesla officials have long demanded India open up its market for the EV giant. Tesla has also promised to develop its supply chain ecosystem in India.
However, the Musk-owned company has stopped short of making any commitment to set up its manufacturing plant in India, something India views as a critical factor in determining its market access.
In a recent interview, India’s Minister for Road Transport Nitin Gadkari sent out a clear message to Elon Musk: Tesla was welcome in India but only if it manufactures locally.
“We welcome Tesla to India. India is a big market with all types of vendors present here. If it manufactures locally in India, it will get concessions,” Gadkari said.
Import duty
Tesla is also seeking a reduction in existing import duty on fully assembled electric cars from 60 per cent to 40 per cent.
To address this issue, India is said to have created a new arrangement, especially for eco-friendly EVs, where extra relaxations could be offered on import duty.
Watch:JSW & Tesla leading India's ambitious electric vehicle plans
Tesla insists that it first wants to start selling cars in India, assess market behaviour and then take a decision regarding setting up of local manufacturing unit.
(With inputs from agencies)