Elon Musk urges Indian Government to reduce import duties to set up Tesla factory

Tesla Inc is likely to set up a factory in India if successful with imported vehicles, Chief Executive Elon Musk said on Twitter, after the company wrote to Indian ministries seeking a big reduction in import duties on electric vehicles, according to two sources with knowledge of the matter.

The electric-car maker's pitch to lower duties, however, is likely to face resistance from Prime Minister Narendra Modi's administration which has championed high import taxes for many industries in a bid to boost local manufacturing.

"We want to do so, but import duties are the highest in the world by far of any large country," Musk said in reply to a tweet about launching the company's cars in India. "But we are hopeful that there will be at least a temporary tariff relief for electric vehicles," Musk added.

Other luxury automakers in India have also lobbied the government in the past to lower taxes on imported cars but have had little success due to opposition from rivals with domestic operations.

Tesla, which aims to begin sales in India this year, said in a letter to ministries and the country's leading think-tank Niti Aayog that slashing federal taxes on imports of fully assembled electric cars to 40% would be more appropriate, according to the sources.