Maharashtra state government’s Minister Jayanti Patil has come up with a proposal for Tesla, a day after his Telangana counterpart. He has invited Elon Musk to set up Tesla’s manufacturing plant in Maharashtra.
Patil highlighted that Maharashtra is one of the most progressive states in India. “We will provide you all the necessary help from Maharashtra for you to get established in India. We invite you to establish your manufacturing plant in Maharashtra.”
A similar proposal had been made by KT Rama Rao, Telangana’s Urban Development Minister. “Hey Elon, I am the Industry and Commerce Minister of Telangana state in India. Will be happy to partner Tesla in working through the challenges to set shop in India – Telangana. Our state is a champion in sustainability initiatives and a top notch business destination in India,” he had written.
On Thursday, Musk in a Twitter post replied to a user that Tesla is still working through a lot of challenges with the Indian government. Tesla and the Government of India have been in talks for years but disagreements over a local factory and the country’s import duties have led to an impasse. The Government has asked Tesla to to ramp up local procurement and share detailed manufacturing plans. But Musk is adamant on his demand for lower taxes so that Tesla can start off selling imported vehicles at a cheaper price.
An Indian minister, in October 2021, has asked the EV company to avoid selling China-made cars in the country and to manufacture, sell and export vehicles from a local factory in India.
Sources say Tesla wants the government to reduce import duties on cars without any commitment of producing in India. “At present, Tesla can bring in cars in Completely Knocked Down (CKD) form with zero duty and assemble and sell them here. The government has put in place a PLI scheme for the auto sector, particularly electric vehicle under which Tesla will get benefit if they produce here,” they said.
The sources also pointed out that by Tesla, through its tweets, is trying to put pressure on the government. “The automobile company wants ease in import duty without any pledge on producing locally.”