Nitin Gadkari makes it very clear how Elon Musk-led Tesla can manufacture electric vehicles in India

Union minister Nitin Gadkari on Tuesday said India has no problem if Tesla is ready to manufacture in India. He said if the US-based Tesla is ready to manufacture its electric vehicles in India then there is no problem but the company must not import cars from China, as per PTI reported.

Gadkari also stated during an interactive session at the Raisina Dialogue that India is a massive market with a lot of potential for all-electric vehicles.

"If Elon Musk (Tesla CEO) 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," he said.

According to PTI, the road transport and highways minister said his request to Musk is to come and manufacture in India.

"But if he wants to manufacture in China and sell in India, then it cannot be a good proposition for India," Gadkari said.

Last year, the heavy industries ministry had also asked Tesla to first start manufacturing its iconic electric vehicles in India before any tax concessions can be considered, PTI report added.

Currently, cars imported as completely built units (CBUs) are subject to customs duties ranging from 60% to 100%, depending on the engine size and cost, as well as the value of insurance and freight (CIF) less than or greater than USD 40,000.

In a letter to the road ministry last year, the US company stated that the effective import tariff of 110 percent on vehicles with a customs value of more than USD 40,000 is "prohibitive" for zero-emission vehicles, PTI report added.

It had requested the government to reduce the 10% social welfare fee on electric automobiles to 40% regardless of the customs value.

It added that these changes will help the Indian EV ecosystem to develop and that the company would invest heavily in sales, service, and charging infrastructure, as well as considerably increase procurement from India for its global operations.

PTI said the company had argued that these proposals would not have any negative impact on the Indian automotive market. No Indian OEM currently produces a car (EV or ICE) with an ex-factory price beyond USD 40,000 (approximately Rs 30.6 lakh), and barely 1-2 percent of automobiles sold in India (EV or ICE) have an ex-factory/customs worth above USD 40,000, said the company.

(With PTI inputs)