Tesla in talks with Indian govt to reduce import duty: Musk

Alain Brian
Juin 20, 2017

Earlier this year, Musk had stated that he was hoping for Tesla to enter India this summer with its products, which has so far not materialised.

The US-based electric vehicle major Tesla is in discussion with Indian government seeking relief on import duties till a local factory is built here, according to the company's Chief Executive Elon Musk.

India's commerce and industry ministry was quick to respond when Musk tweeted his concern about the 30 percent local sourcing requirements through the country's "Make in India" Twitter handle, and said that India's foreign direct investment (FDI) policy does not mandate any minimum sourcing of components by auto manufacturers.

India does not restrict imports but it imposes a huge duty of 119% on completely built unit (CBU) making the cost go up by more than twice discouraging the buyers.

Currently, there is 60% customs duty in India on the imports of fully-built electric cars, which are priced below $40,000. "All foreign EV makers should set up an assembly plant [in India] to get the benefit of bringing vehicles in completely knocked-down condition at 10 percent import duty", Sen said.

If the value of electric cars imported is more than $40,000 then there is 100% customs duty.

Previous year in April, Tesla had stated that it planned to enter India with its Model 3 in 2017 while it began global roll-out of the vehicle in late 2016.

Model 3 is the company's most affordable auto so far and reaches 215 miles of range on a single charge and costs start at $35,000 before incentives. The company's other models include Model S and Model X.

Of late, Musk has been showing a keen interest in the Indian market and earlier this month had tweeted about the country's commitment for selling only electric cars by 2030.

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