Don't expect Tesla to manufacture in India anytime soon, says Union Minister HD Kumaraswamy

Don't expect Tesla to manufacture in India anytime soon, says Union Minister HD Kumaraswamy

Heavy Industries Minister HD Kumaraswamy announced on June 2 that India will soon invite applications under its electric vehicle (EV) manufacturing policy. However, he mentioned that Tesla is unlikely to manufacture vehicles in India anytime soon. The minister added that Tesla is only keen to set up showrooms in India.

Tesla is expected to commence its India rollout with imported EVs, and is unlikely to have any local manufacturing component to begin with.

Earlier this year, Tesla had finalised showroom space in Mumbai and Delhi and posted listings for over two dozen jobs.

In February, Reuters reported that Tesla has finalised its showroom space in Mumbai’s Maker Maxity, a mixed-use development located in the Bandra Kurla Complex, at a monthly rent of around Rs 32 lakh.

The papers show the company has signed a five-year lease from February 16, 2025 and will pay rent of about $446,000 for the first year for a 4,003 square feet (372 square meter) space, almost the size of a basketball court, reported Reuters.

In February, US President Donald Trump had said that if Tesla were to build a factory in India to circumvent its tariffs, it would be 'unfair' to the US.

Meanwhile, the policy seeks to promote India as a manufacturing destination for EVs and attract investment from reputed global EV manufacturers.

The policy, announced in March 2024, offers a reduced import duty of 15% on electric cars priced at $35,000 or more, provided the manufacturer invests at least Rs 4,150 crore (about $500 million) to set up a local factory within three years.

Under this scheme, companies will be allowed to import up to 8,000 EVs per year at the lower duty rate. The policy is part of India’s broader effort to attract companies like Elon Musk-led Tesla, which has long criticised India’s high import duties.

Applications for this may open as early as this month and extend till March 15 next year, reported Bloomberg on June 2 citing people familiar with the discussions who did not want to be named.

Portal to avail e-Vehicle plan for EV manufacturing to open soon, said Kumaraswamy.