The statement assumes significance as India is looking at giving customs duty concessions to Tesla for setting up a plant in India
Commerce and Industry Minister Piyush Goyal visited the manufacturing facility of US-based electric vehicle giant Tesla in Fremont, California, and announced that the company plans to double its auto component imports from India.
Minister Goyal, who is on a four-day visit to the US, highlighted the presence of talented Indian engineers and finance professionals at senior positions in Tesla, contributing to the company's transformative journey in mobility.
He expressed pride in the growing importance of auto component suppliers from India in Tesla's electric vehicle supply chain, stating that the company is on track to double its component imports from India. Goyal also mentioned missing the magnetic presence of Elon Musk, Tesla's CEO, and wished him a speedy recovery.
This visit is notable amid reports suggesting that India is considering providing customs duty concessions to Tesla for establishing a manufacturing plant in the country. In September, Goyal mentioned that Tesla was looking to source components worth around USD 1.9 billion from India in the current year, compared to USD 1 billion in 2022.
Goyal emphasised that the demand for electric vehicles is expected to rise, contributing to the sector's growth. The government had earlier stated that it would not create a separate policy for offering incentives to Tesla, and the company could apply for support measures under existing schemes like the Production-Linked Incentive (PLI) for auto and advanced chemistry cells.
The government has implemented PLI schemes for advanced chemistry cell (ACC) battery storage with an outlay of Rs 18,100 crore and a Rs 26,058 crore PLI scheme for the auto, auto-components, and drone industries.
Addressing queries about possible duty concessions on completely built-up units to attract certain segments of electric cars to India, Goyal stated in September that the government's actions have been equal and without differentiation, and a policy would be formulated accordingly.
In August 2021, Elon Musk expressed Tesla's interest in setting up a manufacturing unit in India, contingent on the success of imported vehicles in the country. He had cited high import duties as a challenge, stating that while Tesla wanted to launch vehicles in India, import duties were the highest globally for a large country.
India currently imposes a 100 percent import duty on fully imported cars with a CIF (Cost, Insurance, and Freight) value exceeding USD 40,000 and a 70 percent duty on those costing less than that amount.