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Indian government charges 100% import duty on vehicles manufactured abroad
Tesla Inc (NASDAQ: TSLA) has put the plans to sell electric vehicles in India on hold after failing to secure lower import taxes, Reuters reported on Friday, citing three people familiar with the matter.
The decision came after more than a year of deadlocked talks with the Indian government representatives.
While Tesla sought to first test the demand for its EVs by selling the imported cars produced in the United States and China at lower tariffs, the government pushed the carmaker to commit to manufacturing locally before lowering the taxes.
The Indian government charges 100% import duty on vehicles produced outside the country.
Tesla, which had set itself a deadline of February 1, the day India unveiled its budget and announced tax changes, to see if its lobbying brought a result, is now abandoning the search for showroom space and reassigned some of its domestic team, sources told Reuters.
For months, the electric carmaker had searched for real estate options to open showrooms and service centres in the key Indian cities of New Delhi, Mumbai and Bengaluru, the report said.
After Prime Minister Narendra Modi's government did not offer a concession on import duty, Tesla put on hold the plans to import cars into India, Reuters reported.
Picture Credit: RushLane
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