Elon Musk’s Plans for India Are Back on Track—How Tesla’s Showroom Could Reshape the EV Market

According to industry insiders, Tesla is reportedly eyeing a return to the Indian automotive market. On Tuesday, Electrek reported that Tesla is reconsidering its entry into the Indian market after previously shied away from it due to high import tariffs and protectionist policies.

The Indian government initially insisted that Tesla build a local factory, but Tesla preferred establishing a market presence first through imported vehicles. A breakthrough came earlier this year when India proposed a compromise on car import duties, potentially paving the way for Tesla and other EV manufacturers to enter the market.

The proposed deal would significantly reduce import tariffs on a limited number of electric vehicles, provided Tesla committed to substantial investments in building EV factories in India over the coming years.

Tesla CEO Elon Musk had planned to meet with Indian Prime Minister Narendra Modi following the announcement of the agreement. However, he ultimately canceled his India trip and visited China instead.

Now, Tesla’s potential foray into the Indian market is back in the spotlight. Reuters reports that the company wants to set up a showroom in New Delhi. However, these discussions are still in the early stages, with no concrete developments yet.

Currently, India offers a reduced 15% tariff on a limited number of imported vehicles. To qualify for this incentive, automakers must invest $500 million in local EV production over five years, beginning within three years of starting imports.