India minister asks Tesla not to sell China-made electric cars in South Asian nation

India’s Minister for Road Transport and Highways, Nitin Gadkari, said he asked Tesla to avoid selling its China-made cars in the country, ahead of the electric vehicle (EV) maker’s expected entry into the South Asian nation.

Tesla should “make cars in India, sell in India and export from India”, and rely on local suppliers, Gadkari said. Tesla models in India will cost 3.5 million rupees (US$46,671) each and the government will provide whatever help the US carmaker needs to make a foray into the nation, he added during a public event on Friday.

Tesla currently produces vehicles in factories in the US and in Shanghai, China and is awaiting final approval for a new plant in Germany.

India is trying to diversify its supply chains away from neighbouring China following deadly clashes between the world’s two most-populated nations along the disputed Himalayan border last year. The Covid-19 pandemic and global trade tensions with China have intensified the need for countries around the world to move manufacturing bases out of the country to reduce supply-chain risks.