New Delhi: Texas-based Tesla had talked with the Indian government about new plans, including taxes on cars and setting up a new factory, ahead of Prime Ministers Modi’s US visit.

Tesla proposed establishing a factory in India for the production of electric vehicles (EVs) and investigated plans for local manufacturing of EV batteries.

This development comes after earlier talks between Tesla and India were shelved last year, mostly owing to the carmaker’s request to decrease the import duty on automobiles, which may reach up to 100%.

While India insisted on indigenous vehicle manufacture, Tesla attempted to test the market with imports at first. Tesla executives further engaged in discussion on how to avail of the Production Linked Incentive (PLI) scheme.

According to reports, while Tesla did not propose lowering import tariffs with officials in its most recent meeting, it did suggest creating a factory, without providing information on either the location or the investment.

There was discussion on which models may potentially be supplied in India, as well as the possibility of establishing a battery manufacturing site in the future. Late last year, it was focused on lowering import taxes on autos, which can be as high as 100%, and talks with the Indian government broke down.

In 2022, India became the third largest automobile market beating Japan and Germany in terms of sales as per reports. According to the Economic Survey 2022-23, India's electric vehicle (EV) market is predicted to reach one crore unit annual sales by 2030 and create 5 crore direct and indirect jobs.

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