Elon Musk, the CEO of Tesla, is anticipated to make his first response following the Indian government's recent approval of a new electric vehicle (EV) policy. Crafted to entice investments from global manufacturers, including Musk's electric car company, the policy signals a significant shift in India's automotive landscape.
The genesis of this development dates back to 2015 when Prime Minister Narendra Modi embarked on a landmark visit to Tesla headquarters in Palo Alto, California. During his visit, Modi was given a tour of the company's electric car plant by the billionaire himself.
In subsequent years, Musk advocated for a reduction in customs duty to enable the import of Tesla vehicles into India. Presently, customs duty on cars imported as completely built units (CBUs) varies from 60-100 per cent, depending on their cost.
Under the newly approved policy, the government has slashed the customs duty to 15 per cent for vehicles valued at $35,000 and above, akin to completely knocked down (CKD) units. However, this reduction is contingent upon the manufacturer setting up manufacturing facilities in India within a three-year timeframe.
This decision effectively opens the door for Musk to enter the Indian market.
In a significant development last year, Prime Minister Modi met with Musk during his visit to the US and commended his endeavors to make technology accessible and affordable across various sectors.
Modi extended an invitation to Musk to explore investment opportunities in India, particularly in electric mobility and the burgeoning commercial space sector.
In response to Modi's 'Make in India' pitch, Musk announced his company's intent to enter the Indian market "as soon as it is humanly possible," emphasizing his commitment to making significant investments in the country.
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