Union Transport Minister Nitin Gadkari, on Friday said that he has asked American carmaker Tesla not to sell its China-made electric cars in India and that the company should manufacture electric vehicles in India both for the local market and exports.
Speaking at a media event, Gadkari said he has also assured the Elon Musk led electric car manufacturing company of all the support from the government’s side for setting up a factory in India.
"I have told Tesla not to sell electric cars in India which your company has manufactured in China. You should manufacture electric cars in India, and also export cars from India. Whatever support you (Tesla) want, will be provided by our government," Gadkari added.
Tesla, on its part has been eyeing the Indian market and wants the government to lower the import taxes on electric vehicles so that it can export cars to the country. Currently, the import duties on electric cars are in the same category as fuel-based cars.
Cars imported into India as completely built units (CBUs) attract customs duty ranging from 60-100 per cent. The tax depends on engine size and cost, insurance and freight (CIF) value of cars.
Tesla had said in a letter to the Transport Ministry that India’s effective import tariff of 110 per cent on vehicles priced above USD 40,000 is "prohibitive" for zero-emission vehicles.
Musk claims that he should be allowed to sell imported cars in India before he takes a final decision on setting up a factory in the country. A Tesla factory to produce cars in India is “quite likely” if the electric automaker can first begin sales with imported vehicles, Chief Executive Officer Musk had said in a subsequent tweet.
However, the government is not convinced by the argument as it is keen that the country sets up a manufacturing base of electric cars of its own in accordance with the Aatamnirbhar Bharat policy.
India has clamped down on Chinese imports after the military stand-off in Ladakh with China refusing to withdraw its troops despite several rounds of talks. India also has a huge trade deficit with China as cheap imports from the Communist country have been flowing in often at the cost of domestic industry.
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