Tesla plans to buy $1.9 billion of auto parts from India

Tesla Inc. is planning to source as much as $1.9 billion worth of auto components from India this year, according to the South Asian country’s government. 

The electric carmaker bought parts worth $1 billion from the nation last year, India’s Commerce and Industry Minister Piyush Goyal said at an event in New Delhi on Wednesday.

Chief Executive Officer Elon Musk in June said Tesla will make significant investments in the country, following his meeting with Indian Prime Minister Narendra Modi in the US.

Tesla representatives didn’t immediately respond to a request for comment.

Tesla and India reopened dialog in May following a year-long impasse. Musk has criticized India’s high import taxes and its electric-vehicle policies, and India, in turn, has advised Tesla not to sell cars in the country that have been made in China, its political rival.

“This is a government that provides equal opportunities to everybody,” Goyal said in response to a question whether India would consider reducing taxes on imported electric cars, as demanded by Tesla. “We will come out with a policy which will be in consultation with all stakeholders.” 

The government wants to see more investments and higher output of electric vehicles in the country in the near future to get the benefits of economies of scale, Goyal said.

India is considering incentives for makers of auto components, Ministry of Heavy Industries Joint Secretary Hanif Qureshi said at the same event, without providing details. The country will continue providing incentives for electric vehicles after the second phase of subsidy program, called Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India, ends in March.