by Our Correspondent in New Delhi
Global electric vehicle giant Tesla is not planning to manufacture in India and is instead focused on setting up retail operations, Union Heavy Industries Minister HD Kumaraswamy revealed on Monday. The company is expected to open two showrooms in the country, even as the Indian government pushes forward its ambitious electric vehicle (EV) manufacturing scheme aimed at attracting global players.
“Tesla is not interested in manufacturing in India. They are going to start two showrooms, but beyond that, we are not expecting much from them,” Kumaraswamy said during a media briefing in the capital. His comments come despite earlier expectations that Tesla might announce a manufacturing facility following Elon Musk’s interactions with Indian leadership.
In February this year, Tesla posted 13 job openings in India, including positions such as store manager, service advisor, and business operations analyst. This came shortly after Prime Minister Narendra Modi met Musk in Washington, fueling speculation of a major investment.
However, the company’s focus appears limited to establishing a retail footprint, as other global manufacturers express stronger interest in the Indian EV manufacturing landscape. Kumaraswamy noted that companies like Mercedes-Benz, Volkswagen-Škoda, Hyundai, and Kia have already shown interest in the government’s flagship EV manufacturing scheme, launched in March 2024.
Under this initiative, companies must invest a minimum of ₹4,150 crore to qualify, meeting stringent domestic value addition (DVA) benchmarks. In return, they are permitted to import up to 8,000 completely built electric vehicles (CBUs) annually at a reduced 15% customs duty, provided each vehicle has a minimum import value of $35,000.
“The scheme is strategically crafted to position India as a global hub for EV manufacturing,” Kumaraswamy said, emphasizing that the initiative supports the ‘Make in India’ and ‘Aatmanirbhar Bharat’ campaigns by ensuring technology transfer and local value creation.
Though initially seen as a move to attract Tesla — which has long criticized India’s high import tariffs — the company’s manufacturing plans appear to have shifted elsewhere. Elon Musk was expected to visit India earlier this year to announce a major investment, reportedly over $2 billion, but postponed the visit citing “very heavy Tesla obligations.” Just days later, Musk visited China — Tesla’s second-largest market — raising questions about the company’s commitment to India.
Meanwhile, US President Donald Trump criticized Tesla’s India expansion plans earlier this year, calling them “unfair” to American interests. He similarly voiced opposition to Apple’s plans to increase production in India.
Despite Tesla’s lukewarm response, India’s EV push remains on track. The Ministry of Heavy Industries issued detailed guidelines for the EV manufacturing scheme on Monday and is expected to begin accepting applications soon. However, think tank Global Trade Research Initiative (GTRI) cautioned that locally manufactured EVs under the scheme may take time to reach the market.
“While the announcement of the scheme guidelines is a positive step, the application process has not opened yet. It may take another six months or more before firms are selected, and production begins,” GTRI stated.
In the interim, approved firms will be able to import electric vehicles at reduced duties, setting the stage for a gradual transition toward domestic production — with or without Tesla.
