Tesla stops India entry as strategy to negotiate well: Chinese state media

New Delhi, June 28

As Elon Musk, who turned 51 on Tuesday, decided to put Tesla's entry into India on hold, Chinese state media has termed the move as a strategic one as the electric car-maker will still eye the Indian market for its potential.

According to a report in Global Times, Tesla might just use the suspension as a "business strategy to further promote the negotiation".

Musk last month categorically said that Tesla will not manufacture cars in India unless it is allowed to sell and provide service to its electric vehicles.

The team Musk hired in India last year has now been diverted to focus on the Middle-East and the larger Asia-Pacific markets.

Manuj Khurana, the policy and business development executive at Tesla in India and who led lobbying efforts in India, has resigned. He was hired in March 2021 and lobbied the Indian government for more than a year to slash the import tax on electric cars to 40 per cent from as high as 100 per cent.

Chinese state media said that the suspension of Tesla's entry plan in India is a typical representation of a number of multinational enterprises, "reflecting a business environment in need of improvement for the South Asian nation to win more foreign investment".

"India's business market environment is still relatively conservative and closed rather than opening up, resulting from the rising economic nationalism," said Liu Zongyi, Secretary General of the Research Center for China-South Asia Cooperation at the Shanghai Institutes for International Studies.

India has been seeking to build an industrial chain with the US under the Indo-Pacific Economic Framework (IPEF) "by trying to exclude and limit China's development in manufacturing and forcing multinational enterprises in China to shift to other markets including India... the cost for such move is still high and will not be paid by the US government", Liu was quoted as saying.

India is rich in labour resources with affordable lower costs, but it currently can't fully undertake the development of mid- and high-end industrial chains to boost its exports.

"India will be able to achieve more rapid and stable development if it can strengthen industrial chain cooperation with China from a realistic perspective," Liu told Global Times.

After Musk confirmed Tesla's arrival in India, then Karnataka Chief Minister B.S. Yediyurappa declared in February last year that the US-based electric vehicle and clean energy company will set up its production unit in the state.

Tesla then registered its office in Bengaluru.

The electric car-maker has not launched any of its electric cars in India or any other country in South Asia yet.

The only Asian market where Tesla has a presence is China.