Exclusive | Nitin Gadkari: Have tried to convince Tesla to start plant in India

(Image: Reuters)

Union minister Nitin Gadkari has said that Tesla is welcome in India but manufacturing cars in China and selling them here is "not a digestible concept".

In an exclusive interview to Network18, Gadkari said that he had an interaction with Tesla India head a few days back and he tried to convince them to start their own plant here to manufacture cars, but "ultimately it is dependent on him to take the decision".

"Tesla is welcome in India, we don't have any problem. Now his (Elon Musk’s) interest is to manufacture Tesla cars in China and sell them in India. We request him that you can start your own plant here. We have all ancillaries available here, you can get quality production here and you can get good sales here. So if you start here, you are welcome, no problem. But manufacturing in China and selling in India is not a digestible concept to all of us," Nitin Gadkari told News18 in an exclusive interview.

These comments come at a time when the government is involved in a standoff with Tesla over import duties. In January, Tesla CEO Elon Musk said that the company was still working through “a lot of challenges” to launch its cars in India.

Tesla received approval for seven of its cars from India’s testing agencies until now. In September last year, the company had taken the request for lowering import taxes to the Prime Minister’s Office, according to Reuters.

Local players however have opposed Tesla’s request for slashing of duties, arguing that the move would hurt investments in domestic manufacturing, the news agency reported.

India levies a 60 percent import duty on electric vehicles that cost $40,000 or less and a 100 percent for those priced above the threshold to protect the domestic industry.

Tesla has complained that high import duties on completely built units of foreign automobiles would restrict the sales of its vehicles as well as that of electric vehicles in general. High duties would also make it tougher to commit to an investment in India, the company said.

During the interview, the union minister mentioned that India is a huge market with the country's automobile industry’s turnover at 7.5 lakh crore and all the reputed brands in the world including BMW, Mercedes, Hyundai, Toyota, Volvo, and Honda are here.

"Actually, we don’t have one company - we have all the world giants present in the Indian market. If we suppose, we give one benefit to one company, we have to give that benefit to other companies also. That is the practical problem" he said.

In the past, Union government officials have said that Tesla can take advantage of the production-linked incentive schemes for the sector, including the one for advanced chemistry cells for electric vehicles.

In recent months, several states including Karnataka, Gujarat, Maharashtra, Andhra Pradesh, Telangana, Punjab, and Tamil Nadu have also invited Tesla to set up a plant in their respective states.