On Wednesday (13 September), Union Commerce Minister Piyush Goyal informed that Elon Musk-led automaker Tesla Inc is interested in coming to India and is planning to procure $1.9 billion worth of auto parts from India this year. The Minister added that Tesla has already acquired auto parts worth $1 billion from India in the last year.
He said, “..Tesla already last year bought $ 1 bn of components from all of you sitting here. I have a list of companies who supplied to Tesla. This year their target is nearly $ 1.7 bn or $ 1.9 bn.”
#WATCH | Delhi: Addressing the Annual Session of the 63rd Automobile Component Manufacturers Association of India, Union Minister Piyush Goyal says, "…Tesla already last year bought $ 1 bn of components from all of you sitting here. I have a list of companies who supplied to… pic.twitter.com/tyIDpmVyoh
— ANI (@ANI) September 13, 2023
He shared this information while addressing the Annual Session of the 63rd Automobile Component Manufacturers Association of India (ACMA). During the event, Goyal also emphasised that he is convinced that this (EVs) is the future and it is something that we must try to attract.
Goyal added that the country can expect that by 2030, there will be a compulsive economic composition for consumers to buy EVs.
There was a time when Tesla was asking for huge cuts, but now there have been reports that the government may be considering juicy concessions on completely building up units, Goyal said while adding that this government has a track record of nine years for treating everyone equally without any differentiation and without any preferences. The Union Minister said this is a government that provides equal opportunity to everyone. “We will come up with a policy in consultation with all the stakeholders,” he said.
When asked about foreign firms looking to invest in India as part of their China plus one strategy, Goyal said that global companies are coming to India because of its attractiveness.
“I totally debunk and reject the China plus one theory. That’s not what is going to drive India. India of today stands on its own feet. The India of today has offerings for the rest of the world both for investment and trade,” he said.
Speaking at the auto conference, the Minister noted that the government may have to take retaliatory action against countries that do not allow access to Indian steel companies but are permitted to send the metal to India.
As per media reports, he was referring to some companies that import automotive steel from their parent country. While the company dependence may vary, the auto industry still holds a 20% dependence on imports which indicates that some automakers are importing by choice.
He also slammed some companies that route their investments from one geography and import components and inputs from third countries that are “not very” friendly to India. Goyal added that the industry should trust the domestic ecosystem however stated, “I am not against imports per se”.
The Minister also talked about the India Middle East Europe economic corridor signed during the G20 Summit in Delhi. “The UAE is a window towards all of Africa, large parts of the Middle East and some parts of Europe, which is why the India Middle East Europe economic corridor has very strategic importance for us because it mainly opens up through this whole region. Our logistics will become more effective,” Goyal said.
Tesla is in talks with the government to invest in India
In 2021, Tesla made its first effort to enter India and was pushing officials to lower the 100% import tax for EVs. However, last year, the talks broke when government officials conveyed that the automaker would have to first commit to manufacturing locally in India.
Recently, in May, the talks between Tesla and the Indian government revived after a year-long hiatus. During a recent India visit, Tesla executives talked about the domestic sourcing of parts and incentives with government officials but it didn’t culminate in a proposal to set up a plant.
However, last month, News agency Reuters reported that senior executives of Tesla Inc. met with officials and the minister. They informed them about their interest in building a factory in India that would produce a low-cost electric vehicle (EV) priced at $24,000. This would be roughly 25% cheaper than Tesla’s current entry-level model, for both the Indian market and export.
According to the media report, Tesla’s senior public policy and business development executive Rohan Patel has met top officials privately in recent weeks. The report added that PM Modi who held talks with Tesla’s CEO Elon Musk in June, during his US trip, is closely monitoring the progress.
After his meeting with PM Modi, Musk announced that Tesla Inc. is likely to make a significant investment in India.
Regarding this, Musk said, “I’m confident that Tesla will be in India and we’ll do so as soon as humanly possible. We don’t want to jump the gun on an announcement, but I think it’s quite likely that there will be a significant investment, a relationship with India.”
