Tesla’s India plan What has changed this time around?

Tesla totem on the Gigafactory in Gruenheide near Berlin, Germany, August 30, 2022.

 

 After the Union Government conclusively turned down a demand for import duty cuts by US- grounded TeslaInc. and the Texas- grounded electric vehicle maker latterly moved ahead to defer its India debut plans back inmid-2022, there are now signs of renewed exertion. 

 

 While the specific details are still under wraps, what's clear is that Tesla seems to have communicated a change in station dropping its demand for an outspoken cut in import duties as a precondition to considering manufacturing in India. And a Tesla platoon, including some of its force chain directors from the US, we ’re in India and have held meetings with crucial nodal union ministries then. 

 

 The change .

 

 Nothing has changed in the government’s position with respect to the import duty cuts, an functionary with one of the nodal ministries handling the case told The IndianExpress.However, it's on Tesla’s side, given that the company now seems willing to bandy manufacturing in India without putting across the import duty cuts as a precondition, If at each there's a change. And if presented with a coherent plan by the electric vehicle maker for domestic manufacture of buses , there's a liability that the government could consider some bribes that could incentivise phased manufacturing. 

This could include some concessions on duties, depending on the domestic manufacturing plan. Some tweaks on the PLI scheme could be in the immolation, among other concessions. 

 

 elderly government officers indicated that the auto manufacturer’s earlier demand for a duty cut was seen as a precondition, that too only for importing buses into the country as completely assembled units, without any immediate or firm offer to set up a domestic manufacturing installation in India. 

 

 The view also, and now, is that any concession on the import duty side has to be offered to everybody as an across- the- board cut, rather of concessions to just one player, a government functionary said. This is indeed more pivotal given that India is presently negotiating free trade agreements with other countries and trading blocs, including the European Union and the UK, which have a competitive auto manufacturing sector and accommodations include a demand for lowering of import duties.

Import duties in India 

 

 Tesla had, in 2021, written to nodal central ministries seeking a reduction in import duties on completely assembled buses . presently, customs duty ranging from 60 to 100 per cent is levied on buses imported as fully erected units( CBUs), depending on the machine size and cost, insurance and freight( CIF) value less or over$ 40,000. For those going $ 40,000 or further, the duty is 100 per cent while the duty on buses going below this is 70 per cent. Tesla had asked for these duties to be cut to 40 per cent or lower.