Government Clarifies Tesla's Make In India Localisation Doubts

The Indian government has stated that Tesla does not need to locally source components to manufacture cars in the country.

By Sukesh

American electric automaker Tesla was expected to enter the Indian market by the end of this year.

But recently, Tesla boss Elon Musk tweeted that it will not happen anytime soon as the localisation of components is not possible.

Tesla Does Not Need Localisation Of Components To Make In India

The Government of India has clarified the issue and stated that there is no need of sourcing the parts locally. If Tesla is planning to set up a manufacturing plant in India, there is no need of any local partner for the components.

Tesla Does Not Need Localisation Of Components To Make In India

The official Twitter handle of the Make In India replied stating that such restrictions only apply to the retail trading of goods. The tweet read, "These, however, are not applicable to manufacturers as goods are made in India."

Tesla Does Not Need Localisation Of Components To Make In India

The tweet also stated that after manufacturing a product in India, a foreign investor is permitted to sell its products in any manner. It also allows wholesale trade of imported goods without any sourcing limitations.

Tesla Does Not Need Localisation Of Components To Make In India

Previously a tweet from Elon Musk read, "Maybe I'm misinformed, but I was told that 30% of parts must be locally sourced and the supply doesn't yet exist in India to support that". He was replying to a query about the India-entry of the US automaker.

Tesla Does Not Need Localisation Of Components To Make In India

Currently, several premium car manufacturers such as Ferrari, Lamborghini and Porsche retail their cars in India. As per law, a fully built imported car costing more than 40,000 dollars (approximately Rs 25.94 lakh) should pay 100 percent customs duty.

Tesla Does Not Need Localisation Of Components To Make In India

In February 2016, Elon Musk stated that the company would launch its products in the Indian market by the second half of 2017 after starting the production of Model 3. But the company has already commenced the production of Model 3.

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Article Published On: Wednesday, May 24, 2017, 11:51 [IST]
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