Tesla Plans to Double Auto Components Imports from India, Piyush Goyal Affirms

India's Commerce and Industry Minister, Piyush Goyal, recently toured the cutting-edge manufacturing facility of Tesla Inc. in Fremont, California, expressing delight at the increasing role of Indian talent in the company's operations. Goyal shared insights on Twitter, revealing that Tesla is set to double its imports of auto components from India, signalling a deepening partnership between the American electric vehicle giant and the South Asian economic powerhouse.

Goyal's four-day visit to the United States takes on added significance against the backdrop of Tesla's CEO Elon Musk's meeting with Indian Prime Minister Narendra Modi earlier this year. Following the meeting, Musk had expressed his intention to visit India in 2024. The minister's visit showcased the integral contribution of Indian engineers and finance professionals holding senior positions at Tesla, underscoring their role in the company's transformative journey in the electric vehicle (EV) industry.

"Visited @Tesla's state-of-the-art manufacturing facility at Fremont, California. Extremely delighted to see talented Indian engineers and finance professionals working at senior positions and contributing to Tesla's remarkable journey to transform mobility," tweeted Minister Goyal. He also expressed pride in the growing importance of Indian auto component suppliers in Tesla's EV supply chain.

Notably, Goyal's visit coincides with reports suggesting that India is considering customs duty concessions for Tesla, potentially paving the way for the company to establish a manufacturing plant in the country. In September, Goyal had disclosed that Tesla was looking to source approximately $1.9 billion worth of components from India in 2023, a significant increase from the $1 billion in 2022.

The minister emphasized the positive trajectory for the EV sector, asserting that the surge in demand for electric vehicles would propel the industry's growth. The Indian government, however, clarified that it would not formulate a separate policy for Tesla but encouraged the company to leverage existing schemes, such as the Production-Linked Incentives (PLI) for auto and advanced chemistry cells.

India's PLI schemes aim to bolster the production of advanced chemistry cell (ACC) battery storage and provide incentives for the auto, auto-components, and drone industries. With an outlay of Rs 18,100 crore for ACC battery storage and Rs 26,058 crore for the auto sector, these initiatives align with the government's commitment to fostering innovation and sustainable development.

Addressing concerns about duty concessions, Goyal emphasized the government's commitment to equality and fairness. "Everything we have done has been done equally without any differentiation, without any preferences. This is the government which provides equal opportunity to everybody. So we will come out with a policy," he stated.

Elon Musk's earlier remarks on setting up a manufacturing unit in India highlighted the challenges posed by high import duties. In August 2021, Musk had expressed interest in the Indian market but cited exorbitant import duties as a significant hurdle. Currently, India imposes a 100% import duty on fully imported cars with a CIF value exceeding $40,000 and 70% on those costing less than that amount.