Tesla wants to enter the Indian car market but can’t because it apparently is in a stalemate with the local government. The automaker doesn’t want to commit to opening a factory in India before it tests the market with vehicles imported from China, while the government has made it clear that it would prefer if the vehicles were manufactured locally.

This has reportedly been the situation for almost one year. 

In January, Reuters reported information it had about talks between Tesla and the Indian government and how even at that point, local officials were not willing to grant the carmaker any tax benefits unless it committed to building a manufacturing site. Tesla wants a tax cut since according to Elon Musk, India has very high import tariffs (as high as 100%).

Recently, India’s transport minister, Nitin Gadkari, made it official when he said

Making in China and selling here is not a good proposition.

India presumably wants to see Tesla make investments in the country, not just allow it to sell its likely very popular EVs without benefitting from it in some way. If Tesla were to build a plant, this would create jobs, bring tech into the country and also allow for the possible creation of a local supply chain, which will be even better for the local economy.

Tesla knows its vehicles will sell in India, but it looks like it will have to be on the latter’s terms. Between the high import tariff and local officials unwillingness to allow Tesla to import Chinese-made cars, the automaker doesn’t seem to have a choice.

Last year, Tesla registered its Indian division and began taking deposits. Now, according to Indian Express, people who paid the $1,000 deposit are not happy they will not be able to go through with the purchase under current conditions; some apparently already want refunds.

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