Tesla has been planning to expand into the Indian market but because of its cars costing much more than the means of most middle-class Indians (due to different cost of living and value of money in the West and India), has been unable to. Thus, it requested the Indian government for lower import duties so as to ensure a successful venture in India with more people buying its cars.

Some senior officials told Reuters that the government is discussing cutting the duties down to 40% from the current 60% for Electric Vehicles that cost less than $40,000 (₹30,00,000). This includes the car’s buying cost, shipping expenses, insurance etc.

India is also considering lowering the tax rate from 100% to a mere 60% for Electric Vehicles that cost more than $40,000 but all these tax cuts are under debate, and nothing is confirmed for now.

In its appeal for reducing the duties, Tesla stressed that the effort would make its cars cheaper for the public and ensure high sales.

India presently ranks 5th among the countries that purchase the highest number of motor vehicles with around 30 lakh cars being purchased by Indian citizens yearly. Of all automobile sales in India, electric vehicles make up a small portion and luxury EVs are all but non-existent.

The officials also said the government would be more receptive to the idea if Tesla helped domestic production of EVs by setting up local manufactories or providing a deadline on when it will do so. This is mostly because the increased sales of Tesla’s products would come at the cost of local business.