Tesla wants to open showrooms, not interested in manufacturing electric cars in India: Minister

Global electric vehicle giant Tesla is not interested in manufacturing in India but is keen to establish showrooms in the country, Union Heavy Industries Minister H D Kumaraswamy said on Monday.

“Tesla... They are more (interested) only to start showrooms. They are not interested to (start) manufacturing in India,” Kumaraswamy told reporters during a press briefing on new guidelines for the government’s scheme to promote manufacturing of electric cars in India.

An official familiar with the matter revealed that while a Tesla representative took part in the initial round of stakeholder discussions on the scheme, the company did not participate in subsequent meetings.

"So far they (Tesla) have not shown interest. Tesla representative only participated in the first round of stakeholder discussions for the Scheme to Promote Manufacturing of Electric Cars in India. The company's representative was not part of the second and third round of the stakeholder deliberations," PTI quoted the official as saying.

Tesla’s engagement with India has remained limited, largely due to concerns over steep import duties. However, India recently reduced customs duties on high-end electric vehicles priced above $40,000, from 110% to 70%, a policy shift seen as a possible opening for Tesla’s market entry.

Donald Trump against manufacturing in India

Tesla had begun ramping up hiring in India for roles such as business operations analysts and service technicians in major Indian cities, triggering speculations that Musk may plan to manufacture soon.

However, US President Donald Trump's criticism may have put boulders in Tesla’s road to manufacturing in India.

“Every country in the world takes advantage of us, and they do it with tariffs... If he (Musk) built the factory in India, that’s okay, but that’s unfair to us,” Trump said in an interview with Fox News.

New guidelines for EV car manufacturing scheme

On Monday, the Ministry of Heavy Industries formally notified a new scheme aimed at promoting domestic manufacturing of electric passenger vehicles. The initiative is designed to attract global investment, support India’s “Make in India” agenda, and accelerate the transition to cleaner mobility.

Under the scheme, approved applicants can import up to 8,000 Completely Built Units (CBUs) of electric four-wheelers annually with a reduced customs duty of 15% for a period of five years.

The imported units must have a minimum CIF value of $35,000. Unused import quotas can be carried forward, but the total duty forgone will be capped at either ₹6,484 crore or the applicant’s actual investment, whichever is lower.

To qualify, companies must commit a minimum investment of ₹4,150 crore within three years, with the manufacturing facility operational within the same period. Domestic value addition (DVA) requirements start at 25% within three years, rising to 50% in five years.

Eligibility criteria include a global automotive revenue of at least ₹10,000 crore and ₹3,000 crore in fixed asset investments, based on the latest audited financials.

The ministry said the application window will open shortly on its official website and remain active for 120 days. A non-refundable application fee of ₹5,00,000 and a bank guarantee covering the investment or duty forgone will be required.