Last Tuesday, April 26, during the annual Raisina Dialogue multilateral conference in India, the Minister of Transport, Nitin Gadkari, invited Tesla to enter the country to manufacture its electric vehicles but clarified that it would not allow their import from China.
According to Reuters, negotiations between Tesla and the Indian government have stalled. The U.S. company is asking for tariff cuts, but India is unwilling to lower taxes if there is no commitment to local manufacturing.
Gadkari used the occasion to send a message to Tesla CEO Elon Musk to manufacture its vehicles in India.
“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,” the transport minister said.
At the same time, he did not miss the opportunity to clarify the conditions and that he does not want Tesla to enter his country and import vehicles manufactured in China.
“But if he wants to manufacture in China and sell in India, then it cannot be a good proposition for India,” Gadkari added.
India’s Prime Minister Narendra Modi has a “Make in India” policy.
According to The Times of India, the ministry of heavy industries told Tesla last year that if it wants tax concessions to be considered, it first has to start manufacturing its vehicles on Indian soil.
Customs duties for imported cars vary between 60% and 100%, depending on if the cost of the vehicle, including insurance and freight, is more or less than $40,000.
On the other hand, import duties for parts sent for assembly in India range between 15 and 30%, according to Fortune.
According to Breitbart, India fears that its car market will be invaded by Tesla vehicles produced in China, where the U.S. company has gigantic factories. This would be why they do not want to give concessions.
Tesla’s shares fell by around 10% on Tuesday, coinciding with the comments made by India’s Transport Minister, and some analysts see this as the primary cause.