Government Denies Tax Exemption to Tesla: Revenue Secretary’s Statement

In India, the government will not provide any tax incentives to the Tesla, the EV manufacturing company owned by Elon Musk, to establish a manufacturing plant. On Thursday, Revenue Secretary Sanjay Malhotra stated, “The Finance Ministry is not considering giving any tax concessions to Tesla.”

Indeed, yesterday it was reported that Tesla is in discussions with the Indian government to establish its supply chain in India and regarding tax exemptions. Earlier this year, Tesla had requested the government to reduce the import duty on completely assembled vehicles from 100% to 40%.

Tesla Seeks to Establish India as an Automotive Export Hub

Business Today has informed government sources that Tesla has requested the creation of a car export hub in countries of the Indo-Pacific region to send cars to India. However, Tesla and the government have not provided any information on this matter so far.

Tesla Car to Be Launched in India at 20 Lakh

According to Reuters, Tesla plans to establish a plant in India to manufacture 500,000 electric vehicles annually. Along with this, the company will introduce electric cars in India with a price tag of 20 lakh rupees.

Tesla Model 3: the Most Affordable Car From Tesla

Currently, we are selling four Tesla electric cars in the American market. These include Model S, Model 3, Model X, and Model Y. Among them, Model 3 is the cheapest car. Its price in America is $32,740 (approximately 26.87 lakh rupees). This car can travel up to 535 kilometers on a single full charge.

Elon Musk Met Prime Minister Modi Last Month

Elon Musk met Prime Minister Modi in New York last month. After meeting PM Modi, when asked about the timeline for Tesla’s entry into India, Musk said, “I believe Tesla will be in India in a short time.”

Musk is also expected to visit India in the coming year, around 2024.

No Conversation Occurred Between Tesla and Government

  • In the year gone by, Tesla expressed its desire to come to India, but after that, there was no discussion between the company and the government. Tesla had requested the government to reduce the import duty on completely assembled vehicles from 100% to 40%. 
  • The company wanted its vehicles to be not just luxury vehicles but also electric vehicles, but the government stated that there is no intention to provide any exemption or reduction in import duty on any electric vehicles imported from other countries. 
  • The government stated that if Tesla promises to establish a manufacturing plant in India, then they will consider giving concessions on imports. 
  • However, Musk wanted to sell this car in India before establishing the plant, and then think about the plant later. In a tweet response on May 27, 2022, Elon Musk stated, “Tesla will not establish a manufacturing plant at a place where it does not have approval to sell cars and provide service.”


India’s government has refused to grant tax incentives to Tesla for establishing a manufacturing plant. Revenue Secretary Sanjay Malhotra stated that no tax concessions are being considered. Tesla had requested a reduction in import duties on fully assembled vehicles. The company also sought to establish India as an automotive export hub. However, no discussions have taken place between Tesla and the government, and the government has expressed no intention to reduce import duties on electric vehicles. Elon Musk, the CEO of Tesla, met with Prime Minister Modi and expressed his belief that Tesla would enter the Indian market soon.

Akash Shrivastav

My name is Akash Shrivastav, and I am a Blogger. I have 8 years of experience in blogging for Finance, Business, Investment, Stock Market, Cryptocurreny and more. Through my writing, I aim to provide readers with insightful and informative content.