Indian Govt to Tesla: Will lower import duty if you set up factory in India

After Tesla requested the Indian government to lower the import duties on electric cars, they have responded. The Union Government has said that it will consider lowering the import duty and offering other SOPs to Tesla in the future but on a condition. The government of India wants the leading electric vehicle manufacturer to invest in India and set up a manufacturing facility in the country.

Indian Govt to Tesla: Will lower import duty if you set up factory in India

Earlier, Tesla had approached the Central Government requesting to lower the import duties. Tesla plans to launch its car in the Indian market in the next few months. However, Elon Musk said on the social media platform – Twitter that the delay is happening because of the huge Indian import duties and taxes.

Tesla plans to bring its electric cars to India through the Completely Built Unit (CBU) route initially before setting a manufacturing facility in the country. The electric automobile manufacturer wants to test the water before investing a massive amount of money to set up a plant in the country.

Indian Govt to Tesla: Will lower import duty if you set up factory in India

However, the government wants them to first invest in a plant and then only they will consider lowering the duties and provide extended sops. The government official also said that the special benefits will not be limited to Tesla but to the whole sector according to ETAuto.

Tesla has built a Gigafactory in China

Tesla currently has five Gigfactories around the world. The closes to India is the China factory, which has an annual capacity to produce more than 4.5 lakh units of Tesla cars. Recently, Tesla revised the prices of its car in China and the most popular model – the Model Y saw a price cut too.

Different state governments in India offered land to Tesla for the Gigafactory. A leaked Indian government document earlier this year indicated that Tesla may build a factory in Karnataka state. However, Tesla and the Indian government is yet to say anything officially on the development at the moment.

The former chief minister of Karnataka, B. S. Yediyurappa also took Twitter to announce that the American car manufacturer will open a Research and Development facility in Bengaluru but did not comment on the manufacturing facility.

Nitin Gadkari, union minister of roads and highway infrastructure, India himself is much involved with Tesla’s entry into the Indian market. He himself shares the developments with the manufacturer and also announced Tesla’s official entry in the Indian market last year.

To promote electric car manufacturing, the Indian government has already planning to offer incentives worth $4.6 billion to the companies that set up advanced battery manufacturing facilities in India.

Tesla will first launch the Model 3, which is the base version of the vehicle in the Indian market. Later, depending on the success and demand for the first vehicle, Tesla will decide to launch the other models in the Indian market.

There are many enthusiasts who have been waiting eagerly to own a Tesla in India. However, since it will be a CBU, the base price of the vehicle is expected to be around Rs 60 lakh at the least. There are already a few Tesla cars on the Indian roads but all of them are privately imported by the buyers.

Shantonil Nag

Shantonil brings a refined blend of expertise and enthusiasm to motoring journalism at With a career spanning over 11 years, he anchors Cartoq's insightful car reviews and test drives. His journalistic journey began as a correspondent at, where he honed his skills in content writing and scripting car reviews. Later, as Senior Editor for, his expanded role included curating and structuring web content. At, his expanded role includes assisting the video team to create high-quality car reviews. (Full bio)