India is likely to take a leaf out of its negotiations with iPhone maker Apple to steer its investment talks with US electric car maker Tesla. The next series of talks could happen as early as this month.
“If the proposal is in favour of ‘Make in India,’ we are willing to consider it. It is all about India wanting to increase its manufacturing prowess. Even in the case of Apple, there was some China involvement, but we were able to sort it out,” a government official told Moneycontrol.
Tesla is exploring alternative investment destinations for its manufacturing capabilities to reduce its reliance on China.
At a meeting between Tesla executives and commerce minister Piyush Goyal tentatively scheduled as early as this month, India’s focus will be on whether the car maker’s investment proposals support the push towards boosting manufacturing within the country, the official said on condition of anonymity.
“When a big company shows interest in India, meetings are an ongoing process to mull all aspects and iron out any issues that may emerge,” the official added.
Tesla plans to build a factory in India that would produce low-cost electric vehicles for the local market and for export, Reuters reported on July 24, citing a person with knowledge of the matter.
India has taken steps to push for the adoption of electric vehicles, including production-linked incentive (PLI) schemes to make advanced chemistry cells and automobiles and auto components. Even the goods and services tax on electric vehicles was reduced to 5 percent from 12 percent.
No concessions or waivers
In the case of Apple, the government is said to have rejected demands for concessions sought by the iPhone maker, including requests to lower import duties on smartphones. India’s approach is usually to make policies for the industry and not for individual companies, which then commerce minister Nirmala Sitharaman had reiterated in 2017 around the same time that Apple sought waivers from local sourcing norms.
Apple currently assembles iPhones in India through Taiwanese contract manufacturers Foxconn, Wistron and Pegatron, which are approved under the government's PLI scheme for smartphones.
Earlier in 2023, India gave preliminary clearances to some of Apple’s Chinese suppliers to form joint ventures with Indian companies to ramp up domestic manufacturing of smartphones, according to media reports. India took the joint venture route to ensure that Chinese component makers that enter the country can function only in partnership with an Indian company.
In 2020, the government tightened rules for foreign investments from countries that share borders with India, making prior approvals mandatory. The stricter norms were seen primarily as a move to thwart potential hostile takeovers of domestic firms by Chinese companies.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
