Musk set to arrive: potential win-win for Tesla and India, some challenges too

Syllabus: GS- III, Subject: Economy, Topic: Industry and Industrial policies, Issue: Industrial sectors and policies and initiatives

Context: Elon Musk’s visit to India may include a pledge of over $2 billion for a car manufacturing facility and discussions with the Prime Minister.

Opportunities in India’s electric car market:

  • India’s electric car market is growing, with the government offering incentives for Tesla to import 8,000 electric cars annually at a reduced duty of 15%.
  • Analysts project that electric vehicles (EVs) will account for around 5% of all automobiles in India by 2030.
  • Tesla setting up a manufacturing facility in India could be a significant moment for the country’s auto sector, akin to Apple’s success in phone assembly.


  • Tesla faces challenges in adapting its products to Indian conditions, such as ground clearance issues with the Model 3.

The way ahead:

  • India’s new EV policy lowers import duties to 15% for electric car models costing over $35,000 if manufacturers invest $500 million in local factories.
  • The policy aims to attract investment from global EV manufacturers and provide Indian consumers access to the latest
  • The policy seeks to boost the Make in India initiative and promote competition among EV players.
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