Tesla has been lobbying the Indian government to reduce tariffs on electric vehicles in order to expand their market in Asia. India is the fourth largest car market in the world.
Tesla brought in electric vehicles from the Shanghai Giga to see demand in the world’s second most populous country.
After that Tesla commits to domestic manufacturing or spends at least $500 million on domestically produced auto parts.
See also: Here’s why Tesla still difficult to penetrate the Indian market
Meanwhile, the Indian government said Tesla should first commit to producing their electric vehicles in India before importing them from other countries.
India’s transport minister Nitin Gadkari has reiterated the Indian government’s position that Tesla should not import electric vehicles from the Shanghai Giga.
Nitin Gadkari said Tesla’s desire to import electric vehicles from the Shanghai Giga runs counter to the Indian government’s efforts to boost local manufacturing.
“If Elon Musk is ready to manufacture in India then there is no problem. Come to India, start manufacturing, India is a large market they can export from India. But if he wants to manufacture in China and sell in India, then it cannot be a good proposition for India,” Gadkari said.
The electric vehicle import tax in India is one of the highest in the world and can be up to 100% on higher EVs valued at over $40,000.
See also: Tesla electric cars officially enter the Turkish automotive market this year
In January, Elon Musk expressed his desire to enter the Indian market but was hampered by government regulations.
“Still working through a lot of challenges with the government,” Musk said in a Twitter post
