Tesla is preparing to enter the Indian market this year, with the government expected to revise the electric vehicle (EV) policy that encourages the production of EVs domestically. To attract manufacturers such as Tesla, the revised policy may require carmakers to demonstrate an annual revenue of ₹2,500 crore by their second year of operation. Additionally, the Indian government may provide further relief on import duties to enhance the growth of the EV sector in the country, thereby facilitating a smoother entry for companies like Tesla.

The Indian government is anticipated to begin accepting applications following the announcement of the updated EV policy in mid-March this year. Approvals are expected to be granted by August 2025, with imports likely to commence shortly thereafter, according to a report from the news agency IANS.

This development coincides with Tesla's recent resumption of operations in India, as evidenced by job postings for at least 13 different positions across various cities. This initiative was reportedly set in motion shortly after Prime Minister Narendra Modi's meeting with Tesla CEO Elon Musk during the Prime Minister's recent visit to the United States.

In recent months, the Indian EV industry has demonstrated significant potential for growth. While Tesla has signalled a renewed commitment to its official operations in India, Vietnamese electric vehicle manufacturer VinFast has already launched electric cars in the country during the Auto Expo 2025. As attention focuses on Tesla, the government is optimistic about receiving a positive response from several major automotive companies regarding the EV policy.

What will the tweaked Indian EV policy offer

The Indian government announced a new EV policy in March 2025. The government announced a reduction of customs duty to 15 per cent with certain conditions for the automakers who want to import their EVs to India. The policy entailed a minimum investment of ₹4,150 crore to set up electric vehicle manufacturing facilities in the country. This new EV policy paved the way for Tesla and other automakers to enter the Indian EV market.

The policy also mandates that local EV production must start within three years and reach 25 per cent DVA (domestic value addition) by three years and 50 per cent DVA within five years at the maximum. Now, the amendment to the policy reportedly will mandate the EV makers to show an annual turnover of ₹2,500 crore in the second year.

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