Tesla Not Interested in Manufacturing in India: Heavy Industries Minister Kummaraswamy

As the government rolled out the much-awaited guidelines of the scheme to promote the manufacturing of electric cars in India, Minister of Heavy Industries H.D. Kummaraswamy said Tesla is not interested in manufacturing cars in India at the moment.

"We are not actually expecting from them [Tesla]. They are planning to start with showrooms. They are not interested in manufacturing in India, as per the information available with us today," Kummaraswamy told reporters on Monday, while announcing the guidelines for the Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMPCI).

Under the scheme, electric passenger cars can initially be imported with a minimum CIF (cost, insurance, and freight) value of $35,000, at a duty rate of 15% for 5 years, compared to the conventional import tariff rates which range from 70% to 100%. This is subject to OEMs committing to invest at least Rs 4,150 crore (approximately $500 million) to Make in India within three years, and to achieve 25% domestic value addition within three years, further increasing it to 50% by the fifth year.

When the scheme was announced last year, many viewed it as a red carpet for Tesla, which has long objected to India's higher import duties on cars. The U.S. electric carmaker and Indian policymakers have been actively engaging over the past year, discussing potential investment and policy incentives. However, Tesla has not made any commitment to manufacturing in India.

In February, Tesla reportedly finalized a 5-year lease agreement for a 4,003-square-foot showroom in Mumbai's Bandra Kurla Complex (BKC), a prominent business and retail hub. The automaker has also reportedly secured a location in New Delhi's Aerocity, a commercial area near Indira Gandhi International Airport, for another showroom. Both showrooms are expected to span around 5,000 square feet and will be directly operated by Tesla, focusing on the sales of imported electric vehicles.

Tesla has posted job listings for various mid-level positions in India, including sales, customer support, and operations.

Meanwhile, global carmakers including Mercedes, Volkswagen, Skoda, Hyundai, and Kia have shown interest in the electric car manufacturing scheme.