Recently Tesla Inc has asked Indian Prime Minister Narendra Modi's office to lower import duties on electric vehicles before it enters the market, ramping up demands that have been met with resistance from several Indian automakers.

Tesla plans to start selling imported vehicles in India this year, but the country's tariffs are among the highest in the world, according to the company. Several local players objected to its request for tax reduction, which was originally reported by Reuters in July, claiming that such a move would discourage investment in domestic manufacturing.

Tesla executives, including Manuj Khurana, the company's director of policy in India, presented the company's requests to Modi's staff in a closed-door meeting last month, claiming that the taxes were too high, according to four individuals familiar with the conversations. According to one of the individuals, during the discussion at Modi's office, Tesla stated that India's duty structure would make doing business in the nation a "viable proposition."

Electric cars costing less than $40,000 are subject to a 60 percent import charge, while those costing more than $40,000 are subject to a 100 percent duty. Tesla cars, according to analysts, will become far too expensive for customers at these rates, limiting their sales. According to three of the sources, Tesla has also requested a meeting between Elon Musk, the company's CEO, and Modi. A request for a response from Modi's office and Tesla, as well as its CEO Khurana, was not returned.

Although it is unclear what Modi's office informed Tesla in return, four sources told Reuters that government officials are split on the automaker's requests. Before considering any import tax reductions, some regulators want the firm to commit to local manufacturing. 
Concern about the impact on the local auto industry is also weighing on the government, the sources added.

Indian companies such as Tata Motors, which recently raised $1 billion from investors including TPG to boost EV production locally, has said giving Tesla concessions would be contrary to India's plans to boost domestic EV manufacturing.

One of the sources, who has direct knowledge of the government's thinking, said: "If Tesla was the only EV maker, decreasing duties would have worked. But there are others." The transport minister said this month Tesla should not sell made-in-China cars in India and should manufacture locally instead, but Tesla has indicated it first wants to experiment with imports.

Musk said on Twitter in July that "if Tesla is able to succeed with imported vehicles, then a factory in India is quite likely."The Indian market for premium EVs is still in its infancy and charging infrastructure is scarce. Just 5,000 of the 2.4 million cars sold in India last year were electric.

One government official said lowering duties for a limited period to pave the way for Tesla's entry could "boost India's investor-friendly image and green credentials" while also attracting more investments.

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