Tesla has been lobbying with the government to relax taxes, for a smooth India-entry.
Tax relaxations were essential for the American giant to give its products the right pricing in the country.
The government's new EV policy is in high favour of EV juggernauts looking for investing in India's EV landscape.
Courtesy of the revised policy, Tesla can now enter the domestic market comfortably by making sizeable investments, setting up local manufacturing units, and planning a proper roadmap for the time ahead.
The new government policy states that any EV company can invest a minimum of 4,150 crores or more in India.
The participating companies must establish manufacturing facilities in the country within 3 years, and start making EVs locally.
These manufacturers are also required to achieve 25% and 50% localisations by the third and fifth year to continue to benefit from the relaxation.
Companies investing atleast 800 million USD (over Rs 66,000 crores) in EV plants here will be allowed to import 8,000 vehicles every year, at a reduced customs duty rate.
As per the new policy, electric cars with a total cost, insurance and freight (CIF) value of USD 35,000 ( Rs 29 lakh) will be levied a lower customs duty of 15% for five years.