Telangana Joins the Race: Telangana Lures Tesla with Business-Friendly Policies

SUMMARY

⏺Telangana joins the race to attract Tesla's first Indian manufacturing plant. The state is wooing Tesla with industry-friendly policies, progressive vision, and a hassle-free permission system. This comes as Tesla is scouting locations across India (Maharashtra, Gujarat, Tamil Nadu) and planning right-hand drive car production for the Indian market.

⏺The Indian government's new policy offering reduced import duties for EV companies setting up local plants makes India a more attractive destination for Tesla. This policy, along with multiple states vying for Tesla's investment, creates a competitive landscape that could benefit Tesla in its India entry.

The battle to attract electric vehicle (EV) giant Tesla to India intensifies as the Telangana government throws its hat in the ring. Industries Minister D Sridhar Babu recently announced ongoing discussions with Tesla to potentially establish a manufacturing plant in the state.

Telangana Makes a Strong Pitch

Babu, active on social media platform X, highlighted Telangana's proactive approach since December 2023 in attracting investments from global giants, with a keen eye on Tesla's India plans. "We've been making efforts for some time to bring Tesla to Telangana," Babu stated.

The minister emphasized Telangana's strengths, including "industry-friendly policies," a "progressive and futuristic vision," and "world-class infrastructure." These factors, coupled with a "hassle-free permissions system," aim to create an environment that is highly attractive to leading companies like Tesla.

Tesla Scouting Locations Across India

This development comes as Tesla reportedly prepares to send a team to India later this month. Their mission? To scout locations for a potential $2-3 billion manufacturing facility. According to a Financial Times report, Maharashtra, Gujarat, and Tamil Nadu will be on the team's itinerary for site identification.

Government Creates Favorable Environment

Telangana's efforts coincide with a new central government policy that aims to incentivize EV production within India. Under this scheme, EV companies benefit from reduced import duties on EVs if they establish domestic manufacturing facilities. For companies like Tesla, willing to invest at least INR 4,150 crore (around $500 million), import duties can be lowered to 15% for five years on vehicles with a cost, insurance, and freight (CIF) value exceeding $35,000.

Tesla Gears Up for India Entry

Adding another dimension to this story, Tesla has reportedly begun production of right-hand drive (RHD) vehicles at its German plant, potentially intended for the Indian market later this year. This move signifies Tesla's commitment to cater to the Indian market, although the specific model planned for export remains unclear (the Berlin facility currently produces the Model Y).

A Competitive Landscape for Tesla

With Telangana joining the race, the competition to secure Tesla's Indian manufacturing plant has intensified. Maharashtra, Gujarat, and Tamil Nadu are also actively vying for Tesla's attention. This competition, coupled with the government's supportive policies, is likely to lead to a favorable environment for Tesla's entry into the Indian market.

The coming weeks will be crucial as Tesla's scouting team visits potential locations and the Indian government continues to attract major EV players. Telangana's emphasis on business-friendly policies could prove to be a significant advantage in this high-stakes competition.