Indian Minister for Road Transport and Highways Nitin Gadkari on Tuesday said importing China-manufactured Tesla cars at lesser duty is not a good proposition for India, indicating that New Delhi would not budge from its old stance on the American EV maker.
"He [Musk] is welcome in India, but suppose he wants to manufacture in China and sell in India, it cannot be a good proposition for India. Our request to him is to come to India and manufacture here", Gadkari stated.
Gadkari has said that the Indian market provides massive business on profitable terms as the country's vendors can supply high-quality spare parts to Tesla at competitive rates.
"We have got all competency, we have got all type of technology and because of that he can reduce the cost", he mentioned.
The minister also said that the Elon Musk-owned firm can export from India's manufacturing unit.
"He will get a good market, and it is really a win-win situation for both…It can be easier for him to make it here in India and sell in India. He will get good profits from here. I will request him to come to India and start manufacturing", Gadkari said, mentioning the growth of around 1,300 percent in some of the EV segments in India.
As per government data presented in the parliament on 31 March, 1.95 million electric vehicles were registered in India, with a growth of 162 percent this year.
Gadkari informed the lower house of parliament that on a year-over-year basis, two-wheeler sales increased more than fivefold, 423 percent, three-wheelers by 75 percent, and four-wheelers by 238 percent.
Currently, the government levies a 60 percent import duty on electric vehicles priced at $40,000 or less. In comparison, the duty burden crossed to over 100 percent if the value of any electric car is more than $40,000.
As per the Indian tax rule, Tesla would have to pay more than a 100 percent duty if it imports its cars onto the Indian market. Elon Musk asked for the import duty cut in order to bring Tesla's models onto the market.
The Indian government recently lowered the goods and services tax on electric vehicles to five percent from 12 percent to boost EV sales.