US electric car maker Tesla will also benefit from producing electric vehicles in India, Union Roads and Highways Minister Nitin Gadkari said on Monday. The days are not far when all-electric vehicles will be priced below the cost of gasoline cars in the country, Gadkari said at an event.

“If Tesla makes electric cars in India, they will also benefit,” he said. On April 26, Gadkari said that if Tesla was ready to produce electric cars in India, there would be “no problem”, but the company would not be allowed to import cars from China.

“If Elon Musk (Tesla CEO) is ready to make in India, then there is no problem coming to India, start manufacturing. India is a big market, they can export from India,” he said in an interactive session on Raisina Dialogue. Last year, the Ministry of Heavy Industry also required Tesla to start producing its signature electric vehicle in India before any tax benefits could be considered. Currently, cars imported as a complete vehicle (CBU) are subject to duties ranging from 60 per cent to 100 per cent, depending on engine size and cost, insurance and freight (CIF) values below or above $40,000.

Last year, the US company said in a letter to the US Department of Highways that an effective 110 per cent import duty on vehicles with a customs value of more than $40,000 was “banned” on zero-emission vehicles. It has asked the government to standardize tariffs on electric vehicles to 40 per cent, regardless of the customs value, and to remove the 10 per cent social welfare surcharge on electric vehicles.

The changes will boost the development of India’s electric vehicle ecosystem, the company said, with significant direct investments in sales, service and charging infrastructure; and a significant increase in sourcing from India for its global operations.

The company argues that the proposals will not have any negative impact on the Indian auto market, as there are currently no Indian OEMs producing vehicles (EVs or ICEs) sold with an ex-works price of more than $40,000 (about 1-2 per cent) with a factory/customs value over $40,000.