• Tesla will open showrooms in India but won't manufacture locally.
• India's new EV policy aims to attract foreign investment in local production.
• High import tariffs and market readiness deter Tesla from local manufacturing.

India's Heavy Industries Minister, H.D. Kumaraswamy, confirmed that Tesla "is not interested in manufacturing cars in India," with the company focusing instead on establishing showrooms. This announcement follows the Indian government's release of detailed guidelines for a new scheme aimed at promoting local EV manufacturing. The minister noted that Tesla's interest lies primarily in selling imported electric vehicles rather than committing to production in India, which might require significant adjustments to their business model, according to Indiatimes and Reuters.

India's new EV policy significantly reduces import taxes from 70% to 15% for companies willing to invest at least $486 million in domestic manufacturing. However, Tesla has shown no interest in establishing a local manufacturing base, a situation exacerbated by high tariffs that Elon Musk has referenced as a deterrent. Mercedes-Benz and Volkswagen, unlike Tesla, are reported to be considering investments under this new policy, which aims to enhance the local EV market, according to TRT Global and BBC.

The Indian government had aimed to attract Tesla to manufacture locally in hopes of boosting the nascent EV sector. However, local competitors, primarily Tata Motors, dominate the market share and have been investing significantly in domestic EV production. Analysts suggest Tesla's reluctance to enter the Indian market for manufacturing may stem from the current maturity of the EV segment and infrastructure challenges. Despite interest from Tesla regarding showroom openings, local manufacturing remains out of their plans, as confirmed by Kumaraswamy to Indiatimes and Reuters.