Telangana Commerce Minister K.T. Rama Rao invites Tesla to set up shop in State

Published : January 15, 2022 21:19 IST

K.T. Rama Rao, Telangana Industries and IT Minister. Photo: NAGARA GOPAL

Although Tesla has been keen on selling its cars in India for a while now, it has complained about high import duties.

The tweet said it all: "Hey Elon (Musk), I am the Industry & Commerce Minister of Telangana state in India. Will be happy to partner Tesla in working through the challenges to set shop in India/Telangana." Telangana’s Urban Development, Industries & Commerce, and Information Technology Minister K.T. Rama Rao made this pitch to Elon Musk, founder and chief executive of Tesla Inc, the Austin, Texas, based American electric vehicle (EV) company. He assured Elon Musk of all help in establishing a Telsa EV factory in Telangana.

Rama Rao’s tweet also stated: "Our state is a champion in sustainability initiatives & a top notch business destination in India." Telangana is already home to a number of marquee U.S. companies, including Apple, Amazon, Microsoft, Google and Facebook.

Telangana, thanks to some sustained hard selling, has also been able to woo several India companies to set up shop in the State. The most recent example is the Kerala-based Kitex group, the world’s largest maker of kids’ apparel.

Rama Rao’s pitch to Tesla came a day after Elon Musk tweeted that his company was "still working through a lot of challenges with the government" of India in a bid to launch their EV in India. A number of States are keen on Tesla setting up shop in their State. Last February, B.S. Yediyurappa, the then Chief Minister of Karnataka, said Tesla would set up an electric car manufacturing unit in Karnataka, something which has not fructified.

Although Tesla has been keen on selling its cars in India for a while now, it has complained about high import duties. Musk had tweeted in 2021: "I'm told import duties are extremely high (up to 100 per cent), even for electric cars. This would make our cars unaffordable."

India levies a 100 per cent tax on imported cars costing over $40,000 (Rs.30 lakh) inclusive of insurance and shipping expenses, with cars less than $40,000 being subjected to an import tax at 60 per cent. Tesla is seeking a 40 per cent import duty on fully assembled electric cars, instead of the currently levied 60 per cent. Tesla has not indicated whether it will start manufacturing its EVs in India.

The Tesla Model 3, currently priced at $39,990, would, after the levying of import duties, cost a whopping Rs 60 lakh in India. Tesla has received approval for all four of its models from India’s testing agencies. 


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