Tesla CEO Elon Musk has posted on Twitter that the company is in discussion with the Indian government over exemption of import duties, restrictions until Tesla gets its own local factory in the market. Musk was tweeting in response to a question posted by a Twitter user, asking when the company plans to bring its electric-powered Tesla vehicles to the India market.
Elon Musk posted in response, “In discussions with the government of India requesting temporary relief on import penalties/restrictions until a local factory is built.” This isn’t the first time that Elon Musk has taken to Twitter to post details about plans in India. When the Tesla Model 3 was announced, India was on the list of countries where people could place pre-orders for the new car by paying $1000. Musk had also confirmed in April last year that Tesla will setup an India wide “Supercharger network” for future Tesla Model 3 car owners.
In February 2017, Musk had tweeted saying Tesla was looking at a “summer” 2017 launch in the Indian market, which of course doesn’t seem possible now. In May, when another user had asked about the future of Tesla cars in India, Elon Musk had tweeted saying, “Maybe I’m misinformed, but I was told that 30% of parts must be locally sourced, and the supply doesn’t yet exist in India to support that.”
Later the Make in India handle had tweeted out to him saying that 30 per cent sourcing rule only applied to goods in retail trading, and that after manufacturing in India, a foreign investor is permitted to sell in any manner: wholesale, retail, including e-commerce. The tweet also pointed out FDI rules in India allows wholesale of imported goods in India without any sourcing conditions.
Based on the tweet, the 30 per cent sourcing rule won’t apply to Tesla, if it starts manufacturing in India. The problem for Tesla’s model cars would still be the 100 per cent plus import duties, if the cars are imported as a whole from abroad. Tesla without any manufacturing unit in the country will also be subject to these.
For Elon Musk and Tesla, the Indian market won’t be an easy one. Setting up the network of Super chargers for the cars will be one part of the challenge. The other will be in setting up local manufacturing to overcome tax and import duty hurdles. Recently when US President Donald Trump had pulled the country out of the Paris convention on climate change, Musk had also tweeted a link to an article about Indian government aiming for all electric vehicles by 2030.