Mihir Sharma, Columnist

Modi Shouldn’t Chase Musk to Make in India

Nosebleed tariffs on imported electric vehicles should be lowered, but not in hopes of persuading Tesla to set up shop.

December 3, 2023 at 8:00 PM UTC

Mihir Sharma is a Bloomberg Opinion columnist. A senior fellow at the Observer Research Foundation in New Delhi, he is author of “Restart: The Last Chance for the Indian Economy.”

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Elon Musk may be close to winning a long-running battle of wills with the Indian government. Policy makers in New Delhi have been hoping to entice Tesla Inc. to produce electric vehicles in India. Musk, meanwhile, wants to sell his cars here without paying the exorbitant import tariffs that India charges.

According to Bloomberg News, the two sides may now be close to an agreement that would slash tariffs on Tesla imports from 2024, as long as the company sets up a factory in India within the next two years. Tesla may invest $2 billion in the plant and commit to buying as much as $15 billion worth of inputs from domestic automotive component producers.