India is set to unveil a new policy aimed at luring electric vehicle (EV) manufacturers and encouraging increased investment in the sector, according to statements made by Commerce Minister Piyush Goyal on Wednesday. This development coincides with ongoing discussions between the Indian government, led by Prime Minister Narendra Modi, and American EV giant Tesla regarding the potential establishment of a manufacturing facility in India.
Sources with direct knowledge of the matter had previously revealed to Reuters last month that India was actively formulating an EV policy that would offer import tax reductions to automakers committed to local production.
When asked about the government’s strategy, Minister Goyal emphasized that consultations with industry stakeholders would precede the policy’s finalization. “We will come out with a policy,” he affirmed, underscoring the government’s determination to attract additional investments and expedite domestic EV manufacturing.
Goyal further emphasized the benefits of achieving large-scale EV production, pointing to the potential for economies of scale in cutting-edge technologies. However, he refrained from disclosing specific incentives that may be part of the forthcoming policy.
Notably, senior executives from Tesla, who have expressed interest in establishing a manufacturing presence in India, engaged in discussions with Minister Goyal in August. Tesla’s ambitious plans include the production of a more affordable EV model priced at $24,000, approximately 25% cheaper than its current entry-level offering, catering to both the Indian market and export demands.
In a separate announcement, Minister Goyal disclosed that Tesla aims to procure components valued between $1.7 billion and $1.9 billion from India this year, building on its previous purchase of $1 billion worth of components in the preceding year. This signifies a growing partnership between the American EV leader and the Indian manufacturing ecosystem as they explore opportunities in the dynamic EV sector.
