According to foreign media reports, a person familiar with the matter said that before considering Tesla's proposal to lower import tariffs on the country's electric vehicles, the Indian government asked Tesla to increase local procurement and share detailed production plans.
Earlier this month, when the Indian government reviewed the tax cut request made by Tesla's chief executive, Elon Musk, India's heavy industry and finance ministry asked Tesla for these details at a meeting. People familiar with the matter also said that the department also asked Tesla about his thoughts on imported or partially assembled vehicles, which have lower import tariffs.
Tesla didn't respond to requests for comment from foreign media. Representatives of India's heavy industry and finance ministry could not immediately be reached for comment.
In July, California-based Tesla sent a letter to Narendra Modi, India's prime minister, to the government of (Narendra Modi), India's prime minister, demanding that import duties on electric vehicles be reduced to 40 per cent from the current level of 60 per cent. The company also called for the abolition of a 10 per cent social welfare surtax, which is levied on all imported cars to finance the country's health and education programs.
At the meeting, Tesla claimed that the company had so far purchased $100m worth of parts from India, and hinted that that number would increase after tax breaks were introduced in India, according to people familiar with the matter. Tesla also promised that once it enters the Indian market, the company will make a large amount of direct investment in local sales, services and charging infrastructure, and will consider broader investment in manufacturing.
Mr Musk has expressed a willingness to enter the Indian car market for years, but he complains that the Indian government's high import tariffs on electric vehicles make it unaffordable to import vehicles in the country.
