Tesla making in China to sell in India not digestible: Gadkari on stalemate with Elon Musk

Nitin Gadkari, the Minister of Road Transport and Highways, has revealed that he met the head of the Indian arm of Tesla “three-four days back". In the meeting, he tried persuading him to set up manufacturing facilities in India, and it is up to them to decide whether they want to foray in the Indian market or not. “I have tried to convince him. Ultimately it is dependent on him to take the decision,” says Gadkari.

Gadkari has also added that it is not a “digestable concept” that Elon Musk wants to manufacture cars in its facilities in China and sell them in India, ostensibly underscoring the animosity with China over border disputes and skirmishes. “Now his (Elon Musk’s) interest is to manufacture the Tesla car in China and make it sell in India,” avers Gadkari, adding that India has adequate ancillaries, which will ensure quality production. “So, if you start here, you are welcome, no problem. But manufacturing in China and selling in India is not a digestible concept to all of us,” he adds.

When asked about Tesla’s lament over duties levied on completely built units (CBUs) — which Musk has stated publicly is the “highest in the world” — Gadkari has replied with candour, saying that the country doesn’t have to cater to just one company. “We have all the world giants present in the Indian market. If we give one benefit to one company, we have to give that benefit to other companies also. That is the practical problem,” he elucidates.

Earlier, the Minister of State for Heavy Industries, Krishan Pal Gurjar, during question hour in the Parliament, lashed at Tesla for “creating jobs in China and the market in India.” Responding to a question by Congress’ K Suresh, Gurjar said, “I want to ask the member if they want India’s money to go to China? That company has not applied as per our policy. For that, the doors of India are open, they can apply as per policy, set up a company, give jobs to our people, increase government revenue.”

Despite spending a year lobbying Indian officials, Tesla is yet to receive the government's approval to sell CBUs in the country, and has not put forth any proposals for a manufacturing facility. That’s against the government’s push for manufacturing in India, and create jobs in India’s secondary sector. Gurjar also said that Tesla has the option to foray into the Indian market via the Production-Linked Incentives (PLI) schemes for both automobile components and advanced chemistry cell (ACC) batteries.

Tesla has got approval from New Delhi for seven of its models from testing authorities in India. However, Tesla sought reduction of import duties, a move which has drawn flak from local manufactures, alleging that slashing duties will disincentivise local production. Musk took to Twitter last month to reveal that the company is still working through “a lot of challenges” with the Indian government, which is delaying the launch of its vehicles in India. Musk’s tweet triggered a flurry of state ministers — including those of Karnataka, Tamil Nadu, Telangana, West Bengal and Maharashtra — inviting the automaker to set up operations in the state.