Government of India clears Tesla CEO's sourcing doubts

Elon Musk, CEO of American electric carmaker - Tesla, had earlier indicated that the company's plans to debut in the Indian market might be put on hold due to a mandatory requirement for carmakers in India to achieve 30% localization. With the CEO's concern coming to light, the Government of India's 'Make in India' twitter handle has replied to Elon Musk's tweet, trying to clear the American entrepreneur's doubts regarding the country's manufacturing and retail policies.

In a new tweet tagged at Elon Musk, the Make in India account has officially clarified that the FDI (Foreign Direct Investment) policy in India doesn’t require any minimum component sourcing by manufacturers. Hence, if Tesla decides to manufacture its cars in India, it wouldn't be required to achieve any localization threshold. Moreover, if a foreign investor manufactures in India, it can sell the products through any channel - wholesale, retail as well as e-commerce.

The Indian FDI policy also allows companies to start wholesale operations in the country for imported goods, without the need to achieve any minimum sourcing requirements. The official twitter account also clarified that component sourcing conditions are only mandatory for retail trading of goods, i.e. for companies that want to start wholly-owned single brand retail stores in the country.