Even before Musk’s visit, Rajasthan enters the race to draw a Tesla India facility

18th April, 2024
Even before Musk’s visit, Rajasthan enters the race to draw a Tesla India facility

As Tesla explores options for its entry into the Indian market, Rajasthan has emerged as a contender, alongside Gujarat, Tamil Nadu, and Maharashtra, offering enticing incentives to attract the Elon Musk-led company.

Following a promising initial meeting between Tesla’s senior executives and Rajasthan government officials, the state has proactively identified potential land parcels for the electric vehicle giant. The Bureau of Investment Promotion has proposed the Bhiwadi industrial town, particularly highlighting the Salarpur or Khushkhera Industrial area as suitable locations due to their existing automotive ecosystem and excellent connectivity via the Delhi-Jaipur expressway.

These sites are part of the industrial zone owned by Rajasthan State Industrial Development and Investment Corporation Ltd (RIICO), which is already home to significant businesses like Honda and is set to open in Phase II soon. Rajasthan is contemplating unique incentives designed specifically for Tesla, potentially departing from the standard e-auction process for land allotment in an attempt to outshine industrial powerhouses.

The state is leveraging its strategic advantages, including proximity to the national capital region, robust transportation links to Delhi and Mumbai, competitive labor costs, and ample land reserves. Plans for a proposed airport near Bhiwadi and a railway cargo terminal further enhance the appeal.

States fighting for Tesla’s investment are acting quickly after Elon Musk visited India and had a meeting with Prime Minister Narendra Modi. The competition to secure Tesla’s presence is getting more intense as the company considers investing $2–3 billion in an Indian manufacturing factory, partly due to recent reductions in import duties on certain EVs.

A delegation from Tesla, hailing from the United States, is currently scouting potential sites across India for the envisioned electric vehicle facility. The proposed investment of $2-3 billion aligns with India’s recent policy adjustments, which offer reduced import taxes on certain EVs for companies committing substantial investments and establishing manufacturing plants within a specified timeframe.

The buzz surrounding Tesla’s plans underscores the growing momentum in India’s electric vehicle sector and the country’s ambition to become a global manufacturing hub for green technologies. As the competition among states heats up, each seeks to showcase its unique advantages and incentives to secure Tesla’s much-coveted investment.

For Rajasthan, the prospect of hosting Tesla’s manufacturing plant represents a significant opportunity to bolster its industrial landscape, create employment opportunities, and contribute to the state’s economic growth trajectory. With negotiations underway and stakes high, the coming months will likely see intensified efforts from all contenders to sway Tesla’s decision in their favor.