Cars & Bikes

Tesla in talks with government to relax import duties

Tesla in talks with government to relax import duties

A few days ago, we put out an article that the India launch of the Tesla Model 3 could be postponed due to the taxation structure in India. But now, we have confirmation that Tesla is currently in talks with the government to temporarily relax its import duties until it builds a factory.

Elon Musk, CEO, Tesla tweeted “In discussions with the government of India requesting temporary relief on import penalties/restrictions until a local factory is built” when someone on twitter asked him about his India launch plans. The American electric car maker has received a lot of bookings for its latest car, the Model 3 from India. However, due to the current FDI policy for single brand retailer, Tesla is unable to begin its India operations.

Unlike the traditional sales approach where a company appoints a dealer to sell their cars, Tesla sells its electric cars through company-operated showrooms worldwide. This sales strategy is a problem for Tesla in India because as per the current FDI policy, single brand retailers needs to source 30 per cent value of goods from India. But the good news is, the government has been planning to ease the FDI norms for single brand retail. If it does, companies like Tesla will surely benefit and will be able to sell its cars in India, which is one of the fastest growing car markets in the world.

We believe the government may support companies like Tesla who are into clean energy transportation. The government is looking at selling only electric cars by 2030. In order for that to happen, the infrastructure needs a major boost and Tesla has been successful in setting up the right infrastructure for EVs in United States as well as in a few European countries.