In a significant development post the US visit of Prime Minister Narendra Modi, the government is planning some ‘special steps’ to welcome Elon Musk’s Tesla cars into India, sources aware of the developments told businessline, adding that the Commerce Secretary Sunil Barthwal has called for a meeting specifically on the automotive sector on Wednesday evening.
The meeting has been called specifically to discuss the automotive sector, in order to prepare for the Bilateral Trade Agreement (BTA) negotiations.
“Agenda of the meeting is to discuss the offensive asks of India from US and offensive asks of US from India and how these asks can be incorporated in a BTA (Most Favoured Nation (MFN) basis or bilateral),” government sources told businessline.
The development is a step forward after the Joint Statement issued by the Indian and US leaders during their meeting on February 13 in Washington. The vision for both countries is to increase bilateral trade to $500 billion by 2030 and negotiate a multi-sector BTA, government official noted.
“In order to prepare for the BTA negotiations, sectoral consultations are also being held with the Ministries/ Departments concerned,” the official said, adding that in this regard, a meeting has been called under the chairmanship of Commerce Secretary on Wednesday evening.
According to sources, the Centre has been holding several meetings at different levels and Ministries over the last one year, so that the US-based electric vehicle maker can also participate in the country’s growing EV market along side the top Chinese EV maker BYD (also world’s largest EV manufacturer right now), Vietnam-based VinFast, South Korea-based Hyundai and Kia, and European car makers like Skoda Auto Volkswagen Group, Renault, Audi, BMW and Mercedes-Benz, who have committed to bring their latest EVs here.
Apart from these manufacturers, auto majors such as Maruti Suzuki India, Mahindra & Mahindra and Tata Motors are also participating in the country’s various schemes (like production linked scheme and Scheme to Promote Manufacturing of Electric Passenger Cars in India), to achieve 30 per cent of total vehicle sales from EVs by 2030.
In fact, in a meeting held by the Ministry of Heavy Industries a few months ago, an advisor representing Tesla — The Asia Group (TAG) had even attended a stakeholders’ meeting on the new EV policy along with representatives from these companies.
However, Tesla’s route to sell its vehicles is a bit different from other manufacturers, as it directly deals with the customers (direct retail). It will have a car on display at a showroom, and once the customer agrees to buy the car, every transaction will be done online after that, till delivery of the vehicle at the buyer’s doorstep.
According to some analysts, Tesla’s cars will still be expensive as compared to others in the market right now, as it doesn’t have any EV in the price bracket of around $25,000 yet. Therefore, with the current import duties in India, the prices would be quite a lot. For instance, import duty on completely built unit (CBU) cars costing above $40,000 is 100 per cent and below $40,000 CBUs are at 70 per cent, to promote domestic manufacturing.
In the recent Union Budget, too, the government reduced the import duty on CBU, semi-knocked down (SKD), and completely knocked down (CKD) vehicles, with the goal to promote domestic manufacturing.
Tesla’s hiring plan
Meanwhile, Tesla has posted as many as 13 jobs in India for various roles, including business operations analyst and customer support specialist. As per the job postings on the company’s website, the posts are for the ‘Mumbai Suburban’ area.
Pointers: –
1) in 2016, Elon Musk showed interest to sell Tesla cars in India, even started accepting bookings for booking amount of $1000
2) In 2021, Elon Musk announces Tesla may set up a manufacturing unit in India if it first succeeds with imported vehicles in the country
3) But, says Indian import duties are too high
4) In 2022 again, says would not manufacture its products unless it is allowed to first sell and service its cars in India
5) In April 2024 Elon Musk postpones his proposed visit to India at the last minute citing “very heavy Tesla obligations”
6) His proposed visit raised expectations of plans for the way forward for selling Tesla electric cars in India at the earliest
7) February 2025, PM Modi visits US, meets Musk and a week after Commerce Secretary calls for meeting specifically on ‘Automotive Sector’
8) To discuss offensive asks of India from US and offensive asks of US from India, and how these asks can be incorporated in a BTA
