Tesla suspends plans in India over tariffs

Reverse gear for Tesla in India. The company has put its plans to sell electric vehicles on hold, abandoned the search for premises and reassigned part of its team on site, having failed to obtain lower customs duties. The move ends more than a year of dead-end discussions with Indian government officials, with Tesla first seeking to test demand by selling electric vehicles imported from its production centers in the United States and China, to lower rates.

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But the Indian government is pushing Tesla to commit to manufacturing locally before lowering customs duties, which can reach 100% on imported vehicles.

Projects for showrooms and service centers suspended

Tesla paused plans to import cars to India after Prime Minister Narendra Modi’s government failed to offer concessions when it presented its budget and fiscal policy on Feb. 1. Tesla and an Indian government spokesperson did not immediately respond to a request for comment.

For months, Tesla has been looking for premises to open showrooms and service centers in the cities of New Delhi, Bombay and Bangalore, but that project is also on hold, two of the sources said. Tesla has also assigned additional responsibilities in other markets to some members of its local team. Its head of policy and development in India, Manuj Khurana, has had “product” responsibility in San Francisco since March, as shown in his LinkedIn profile.

Narendra Modi has sought to lure manufacturers as part of his ‘Make in India’ campaign, but his Transport Minister Nitin Gadkari said in April it would not be a ‘good proposition’ for Tesla to import cars from China to India.

(with Reuters)

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