There has been speculation for around a decade over Tesla setting up manufacturing units in India, but after negotiations, flip-flops and near-misses, as things stand, Tesla does not intend to start manufacturing in India.
India’s Union Minister for Heavy Industries and Steel HD Kumaraswamy has said that Tesla isn’t looking to start manufacturing in India. Kumaraswamy was asked about the large global auto manufactures that India was looking to grow their manufacturing bases in India. “Mercedes Benz, Volkswagen, Skoda, Hyundai and Kia — all these companies have already shown interest,” he said.
“What about Tesla,” a reporter asked him. “We’re not expecting investment from them,” Kumaraswamy said. “They’ve only (want) to start 2 showrooms. They are not interested in manufacturing in India,” he added.
“So you’re saying that Tesla is not interested in manufacturing in India?” the reporter incredulously asked him. “Yes madam,” replied a bureaucrat. “As of the information that’s available with us. They’re only interested in opening showrooms. The real intent we’ll know once we open their application. What the Minister is saying is about people who’ve come and expressed interest in manufacturing,” they added.
This is the clearest admission yet that Tesla’s plans to manufacture in India are currently in limbo. For years, Tesla and the Indian government had been negotiating over the duties imposed on Tesla’s imported cars in India. India had been advocating for not reducing duties if Tesla’s cars weren’t manufactured in India, while Tesla wanted lowered duties for its imports. Talks appeared to have reached an impasse until Donald Trump, backed by Tesla CEO Elon Musk, became US President. At that point, it appeared that Tesla had gained more leverage, and not only was it proceeding with selling its cars in India at presumably lowered duties, Musk’s other company, Starlink, had also been given the green light to set up shop in India.
But this is a fluid situation. Just last week, Musk stepped aside from his regular role at DOGE, and there have been reports of his rift with Donald Trump. If Musk is no longer in Trump’s good books, it could make it harder for him to negotiate lowered duties for Tesla cars in India. But as things stand, it appears that Musk is having his way — Tesla is currently intending to sell its cars in India without manufacturing them on Indian shores.