Amid duty row, Tesla team moves out of India to explore Middle-East market

Tesla CEO Elon Musk apparently is more interested in his Twitter acquisition rather than paying attention to what the Indian government has been reiterating now for months. While Union Ministers kept offering Tesla to come and manufacture electric cars in India, Musk seems not much interested in responding to several requests made by the Indian government, especially by Union Road Transport and Highways Minister Nitin Gadkari.

This comes in the wake of reports that the team he hired in India last year has now been diverted to focus on the Middle-East and the larger Asia-Pacific markets. For instance, Nishant Prasad, in charge of establishing Tesla's supercharger network in India, has updated his LinkedIn profile to Charging Operations Lead-APAC. Manoj Khurana, who was Tesla India’s first recruit, responsible for public policy and business development, relocated to California last month to take up a product role.

The move by Musk-led Tesla is nothing but a retaliation as the Indian government has not accepted the demand by the CEO to reduce import duties on Tesla vehicles.

From Telangana Minister for Industries, KT Rama Rao, to Maharashtra Minister and state NCP President Jayant Patil, several Indian leaders have made repeated appeals to Musk to bring Tesla to India but to no avail. GAdkari, during the `Raisina Dialogue 2022` last month, said that if Musk wants to manufacture in China and sell Tesla cars here, "it cannot be a good proposition for India".

"Our request to him is to come to India and manufacture here. We have no problems. The vendors are available, we offer all kinds of technology and because of that, Musk can reduce the cost. India is a huge market and offers good export opportunities too. Musk can export Tesla cars from India," he told the audience.

Reiterating his stand on Tesla manufacturing in India, the minister said earlier this month that if Musk comes to the country and makes Tesla cars here, that will also benefit the electric car-maker.

Gadkari further stressed on the fact, earlier in February that Musk has to manufacture in India first in order to roll out Tesla cars on the roads. Asked about Tesla`s demand to cut customs duties on electric cars, Gadkari said that the country cannot appease one automobile company.

Musk had tweeted that he faced challenges from the government for releasing its products in India. "Tesla isn’t in India yet due to "Challenges with the government", he posted.

Currently, India levies 100 percent tax on the imported cars of price more than $40,000 (Rs 30 lakh), inclusive of insurance and shipping expenses, and cars less than $40,000 are subject to 60 percent import tax. With a $40,000 (over Rs 30 lakh) price tag, Tesla Model 3 may remain an affordable model in the US but with import duties, it would become unaffordable in the Indian market with an expected price tag of around Rs 60 lakh.

Musk has said that India’s import duties on EVs are "highest in the world by far".