After going through a fairly tough negotiation process, Tesla finally officially announced that they had canceled to enter the Indian market because the negotiations between the two parties did not find a common ground.
In actual business, Tesla had set up a small office in Bengaluru, the capital of the southern Indian state of Karnataka. But unfortunately, Tesla’s proposal asking for a reduction in import duties for electric cars has not been responded to by the Indian government.
The Indian government’s decision to maintain high tariffs on imported cars is not without reason. The Indian government is trying to encourage Tesla to go into local production, and not sell units imported from the Shanghai Giga.
Tesla actually agreed to build a factory in the country, but they asked for time to do market research using imported cars to find out the demand there. On this basis, the negotiations went back and forth, because each party had different interests.
Last month India’s transport minister, Nitin Gadkari announced that Tesla was still welcome to build factories in India. With a note, there is no more discussion of imported cars, let alone selling imported cars from China.
Even though the collaboration with Tesla was canceled, at least the Indian government is trying to prioritize local production over imports from other countries. In addition, the Indian government is reportedly in talks with Mercedes-Benz, which reportedly intends to set up a factory in India.