Tesla Inc (NASDAQ:TSLA) is to delay its plans to sell electric cars in India, has stopped searching for showroom space and reassigned some of its domestic staff as a result of not being able to negotiate lower import taxes, state media reports.
The decision follows several months of deadlocked negotiations with Indian government representatives as Tesla initially offered electric vehicles imported from production hubs at US and China at a lower tariff in order to gauge demand.
However, the government of India is pressing Tesla to commit to local production before it will lower import tariffs, which can be as high as 100% for imported vehicles.
Tesla had set a deadline of February 1, the day India announces its budget and tax changes, to see if its lobbying brought a result, reports Reuters.
But when Prime Minister Narendra Modi's government did not make a concession, Tesla put on hold its plans to import cars into India.
Tesla also has been exploring options for opening showrooms and service centers in New Delhi, Mumbai, and Bengaluru for months, but that is now also on hold.
There is a small Tesla team in India that has been given additional responsibility for other markets, say reports with India policy executive Manuj Khurana taking on an additional "product" role in San Francisco in March, confirms his LinkedIn profile.