Tesla is finally making its long-awaited entry into the Indian market, with plans to ship a few thousand cars to a port near Mumbai in the coming months. The company is expected to start selling its vehicles in three major cities – Mumbai, Delhi, and Bangalore – around the third quarter of this year. Tesla’s India plans are influenced by ongoing tariff negotiations between India and the US, with the EV giant awaiting a reduction in the 110% import tax.
According to sources, India’s government is expected to ease restrictions on electric-vehicle imports as part of a broader trade deal with the US. This could include raising the cap on EV imports from 8,000 to 50,000 vehicles and lowering import taxes. Tesla has been pushing for reduced taxes and Customs duties, which currently amount to an effective tax of 110% on cars priced above $40,000.
The company has revived its India plans following a meeting between Elon Musk and Indian Prime Minister Narendra Modi, with new job postings for showrooms and deliveries. Tesla will initially operate an import-only business in India, with no plans to manufacture locally. The company will launch a bookings portal as part of its market entry, led by Prashanth Menon, a long-time Tesla executive.
The entry of Tesla into the Indian market is significant, as it would cater to the country’s increasingly affluent upper-middle class population. However, it may also pose a threat to local car manufacturers that employ thousands of people in manufacturing plants. The development comes as Tesla faces declining sales in other markets, with worldwide vehicle deliveries falling last year for the first time in over a decade.