Tesla Lobbies Prime Minister Modi's Office To Slash Taxes Before Entering The Indian Market

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Tesla wants to begin selling imported cars in India this year but says taxes in the country are among the highest in the world. Its request for tax cuts - first reported by Reuters in July prompted objections from several local players, who say such a mov

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Mar 27, 2023 10:28 pm IST

Published On

Oct 21, 2021 06:17 pm IST

Last Updated On

Mar 27, 2023 10:28 pm IST

**Tesla Lobbies Prime Minister Modi's Office To Slash Taxes Before Entering The Indian Market **

Tesla wants to start selling imported cars in India this year but says taxes within the country are among the best within the world. Its request for tax cuts - first reported by Reuters in July prompted objections from several local players, who say such a move would deter investment in domestic manufacturing.

Therefore, Tesla has urged Indian Prime Minister Narendra Modi's office to slash import taxes on electric vehicles before it enters the market, four sources told Reuters, ratcheting up demands that faced objections from some Indian automakers.

Tesla executives, including its head of policy in India, Manuj Khurana, took the company's demands to Modi's officials last month in a very closed-door meeting, arguing that the taxes were too high, four sources acquainted with the discussions said. During the meeting at Modi's office, Tesla said that India's duty structure wouldn't make its business within the country a "viable proposition", consistent with one amongst the sources.

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India levies a tariff of 60% on electric vehicles that cost $40,000 or less, and 100% duty on those priced over $40,000. Analysts have said that at these rates Tesla cars would become far too costly for buyers and will limit their sales. Three of the sources said, Tesla has separately put in a request for a gathering between its Chief Executive Elon Musk and Modi, . Modi's office and Tesla, similarly to its executive Khurana, failed to reply to a call for participation for comment.

It is not clear what Modi's office specifically told Tesla in response, but the four sources told Reuter's administration are divided over the U.S. automaker's demands.

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Some officials want the corporate to decide to local manufacturing before considering any import tax breaks. Concern about the impact on the local auto industry is additionally weighing on the govt., the sources added.