Elon Musk trying to put pressure; reduce import duty on Tesla, say govt sources

The government has rejected Elon Musk's claims on the "challenges" which the billionaire said his company Tesla is facing while working with the Indian government to get its cars launched in the country. Sources told Business Today that Musk is trying to put pressure on the government through social media and that Tesla wants the country to reduce import duties on its cars without committing to produce in the country.

The sources said that the government will not bow down to pressure tactics. They added that India currently has a PLI scheme for automobiles, especially electric vehicles, under which Tesla will get benefits if they produce locally. Tesla can bring in cars in kits with zero per cent duty and assemble them in India.

The comments come after Elon Musk earlier in the day, while replying to a Twitter user, said, “Still working through a lot of challenges with the government.” Musk was replying to a question on when Tesla cars will be launched in India.

Musk’s Tesla that has been looking to enter the Indian market has been asking for relaxation in import taxes. He said to the government that the import tariff of 100 per cent with vehicles above $40,000 is ‘prohibitive’. Most of Tesla models are priced over $40,000, meaning that the company would have to pay the full import tariff. Elon Musk has asked the government to reduce the import tariff to 40 per cent.

India has kept import duties high so as to boost local manufacturing.

The government had earlier too asked Tesla to manufacture its cars locally, and not to import.

During the India Today Conclave 2021, Union Minister for Road Transport & Highways Nitin Gadkari said that Tesla will enter the Indian market soon. “I asked Tesla officials not to make the car in China and sell it in India. It is something I had in my mind and I told them. Come to India, make it here, sell it here, and export from here. The government will provide you all the help and support you need,” he had said. The minister had stated then that Tesla will come to the country soon, and that they have started their marketing.

Niti Aayog’s Vice Chairman Rajiv Kumar had also urged Tesla to manufacture its cars locally. He said that Tesla should not only ship its products to India as that will not create jobs.

Also read: ‘Lot of challenges with government’: Elon Musk on Tesla’s India launch

Also read: ‘A Tesla car will cost Rs 35 lakh’: Nitin Gadkari