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Tesla Still Welcome in India After Musk Picks Chinese Site

Updated on
  • India ready to offer land, other help, transport minister says
  • Carmaker selected China for its first assembly plant overseas

India is still open to Tesla Inc. setting up operations in the country, even though the electric-car maker chose China for its first car assembly plant overseas.

“If they are coming, if they are ready to come, we will welcome. We are ready to offer them land and all type of help,” Transport Minister Nitin Gadkari said in an interview. “Presently Tesla doesn’t have any proposal to come to India,” he said. Palo Alto, California-based Tesla declined to comment.

Electric Boom

Sales of electric vehicles continue to rise globally

Source: Bloomberg New Energy Finance

Tesla, which last year said it was working with the Shanghai government on an assembly plant in Shanghai, had held months of public and private discussions with India before opting for the Chinese site. Chief Executive Officer Elon Musk had discussions with Indian officials -- some of them in public Twitter posts -- about the nation’s policies on manufacturing and import of electric vehicles.

Modi’s Plan

Prime Minister Narendra Modi on Tuesday told the World Economic Forum in Davos that India is removing red tape and laying out the red carpet for global investors.

“More than 1,400 archaic laws that were an obstacle to doing business” have been abolished in the last three years, he said. Modi is spearheading efforts to attract foreign investment to kick start growth in India’s $2.3 trillion economy, which is forecast to expand at the slowest pace since 2014 this year.

Responding to a question of whether India lost out on an opportunity with Tesla, Gadkari said it was a decision for the company to make. “I requested them, I met them in America, but their first point was China at that time,” he said on Tuesday in New Delhi.

Musk Discussions

Musk said in June his company was in discussions with the government of India requesting temporary relief on import penalties or restrictions until a local factory is built. In May, Musk flagged concerns about the country’s local sourcing norms, before the government clarified some of them in a tweet.

Modi’s Make in India campaign envisages creating the world’s next manufacturing hub by encouraging domestic and foreign companies to set up factories locally. Tesla’s expansion also comes as India pursues Modi’s ambition for all new car sales to be electric models by 2030 as part of a plan to combat climate change. That target is being seen by carmakers as a tough one to achieve because of lack of charging infrastructure and limited manufacturing capabilities of local companies.

Gadkari said he sees this scenario changing rapidly. A change in the tax structure for electric and alternative fuel vehicles will lead to a shift to environment-friendly cars, he said.

“I feel we don’t need any deadline,” Gadkari said. “In two years, you will see the miracle.”

— With assistance by Dana Hull

(Adds details on India’s economy in fifth paragraph.)
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