While Tesla is soon expected to launch in India, the union minister shared the Government’s concern on June 18. The company is welcome in India but should work according to the Atmanirbhar policy.
On June 18, during the Global Summit, union minister Mahendra Nath Pandey addressed this issue. He stated that the Government would not compromise on the Atmanirbhar policy in any way. The company is most welcomed but the Government policy should be strictly maintained.
The company has been making efforts to reduce the import duties imposed by the Government but hasn’t received a positive response. Currently, the import duty for fully imported cars is 100 percent for values more than $40,000 with Cost, Insurance, and Freight (CIF) and 60 percent on those below the stated amount.
Elon Musk, founder and Chief Executive Officer (CEO) of Tesla had mentioned earlier that he will first sell and service the car in a particular location and then set up a manufacturing plant. The company has no plans to set up manufacturing units now. Manufacturing of the car locally, in India will take place after selling a certain number of units in a particular location, which is the company’s intent. Currently, the plan to produce and sell electric cars in India is on hold.
Tesla in India
Tesla is an American automation company that is specialized in manufacturing electric vehicles. The company was set up in 2003 and is currently the world’s biggest manufacturing company.
In August 2021, the company founder and CEO shared a tweet mentioning their plans to launch in India. While this excited everyone, the company has been facing various issues with the processes. The Indian Automobile market is crowded with major four to five companies dominating.
Electronic vehicles have started catching eyes very recently. With the Indian infrastructure, setting up electric charging stations and maintaining those has been a matter of concern. On the other hand, the American automobile company expressed its interest in developing these facilities.
Secondly, the company has faced issues with Government policies and taxation. While the company stated that the import duties are very high, ‘one of the highest in the world’ Indian Government has not shown interest to reduce them. Instead, the Government insisted on setting up a manufacturing unit. The Government has encouraged the company to use Indian talents and support Indian resources. The company responded saying that they will first sell and service before setting up a manufacturing unit.
Since the announcement of entering India, the company has not mentioned anything officially. The decisions are on hold and negotiations are expected.
Atmanirbhar Bharat is an initiative taken by the Indian Government to become self-reliant. It was launched in May 2020 imposing a ban on Chinese imported goods. For the automobile industry, the parts were imported from various countries. With this initiative, the companies were encouraged to manufacture their parts in the country. So far, the government has been successful with its decisions. Electric vehicles have been manufactured in India on a large scale since 2020. The demand has seen a rise considerably.
With Tesla’s entry into the market, Indian manufacturers will experience tough competition. While the Government has constantly taken efforts to encourage the manufacturing of Tesla’s vehicles in India, the company has shown no interest. After the statement made by the union minister yesterday, the company is expected to reconsider its decision.
The launch of the American automobile company is much awaited in India. But, it should also be beneficial for the country and its economy. By taking correct and necessary measures, the launch can be successful as well as beneficial for both.