How Elon Musk's Tesla Can Learn From Apple's Negotiations With Govt In Its Bid To Enter India

Tesla CEO Elon Musk met India's PM Modi last month in the US and announced that the EV maker will enter India as soon as humanly possible. But since then, there has not been much breakthrough, despite Tesla executives meeting Indian government officials multiple times.

With the future still looking uncertain, it seems that Tesla can take a leaf out of iPhone maker Apple's book as far as negotiations with the Indian government in recent years are concerned. Perhas can help the EV giant in its mission to enter India soon.

Willing to consider Tesla's 'make in India' proposal

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"If the (Tesla) proposal is in favour of ¡®Make in India,¡¯ we are willing to consider it. It is all about India wanting to increase its manufacturing prowess. Even in the case of Apple, there was some China involvement, but we were able to sort it out," a government official said. Tesla is exploring alternative investment destinations for its manufacturing capabilities to reduce its reliance on China.

In the upcoming meeting with Tesla, India¡¯s focus will be on whether Tesla's investment proposals support the push towards boosting manufacturing within the country, the official said on condition of anonymity.

"When a big company shows interest in India, meetings are an ongoing process to mull all aspects and iron out any issues that may emerge," the official added, as per the Moneycontrol report.

No concessions or waivers like Apple?

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Earlier this month, when reports that Tesla could bring its cheaper Model 3 to India for around Rs 20 lakh came out, India's finance ministry made it clear that it is not considering any duty waivers for Tesla, Revenue Secretary Sanjay Malhotra said.

If we look at the case of Apple, the Indian government is said to have rejected demands for concessions sought by the iPhone maker, including requests to lower import duties on smartphones. India¡¯s approach is usually to make policies for the industry and not for individual companies, which then commerce minister Nirmala Sitharaman reiterated in 2017 around the same time that Apple sought waivers from local sourcing norms.

So, even if Tesla, despite its insistence, does not get waivers or concessions from the Indian government, it should go ahead with its plans, as Apple did. Instead of dropping its plan to enter India, Apple put together an India team in 2018 that included local experts who would work closely with the government and industry associations. The reason was to align the Apple business in India with government priorities: enhance manufacturing, push the ¡®Make in India¡¯ agenda, and generate employment.

So the idea was now to build a win-win model for everyone¡ªthe tech giant as well as the Indian government. As per the Rediff report, Apple also had to assure the government that it would not indulge in predatory pricing, which would impact local retailers if single-brand rules were tweaked. It also conceded to the demands of competing players, even though it did not benefit from them, so that the scheme was up and running for everyone.

And now, Apple is producing and even exporting phones from India and assembling iPhones through Taiwanese contract manufacturers Foxconn, Wistron, and Pegatron, which are approved under the government's PLI scheme for smartphones.

Earlier this year, India reportedly gave preliminary clearances to some of Apple¡¯s Chinese suppliers to form joint ventures with Indian companies to ramp up domestic manufacturing of smartphones. India took the joint venture route to ensure that Chinese component makers that enter the country can function only in partnership with an Indian company.

Also Read: Why Apple CEO Tim Cook Once Rejected Elon Musk's Offer To Acquire Tesla

Tesla executives may meet Piyush Goyal soon

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Senior executives at Tesla are likely to meet Commerce and Industry Minister Piyush Goyal in a few days, as soon as this month, as per the ET report. Though the talking points of the meeting are not known, this series of meetings is a follow-up on the virtual meeting that happened between Elon Musk and Goyal earlier this month.

Officials of the ministry of commerce and industry and the ministry of electronics and information technology have been in talks about Tesla¡¯s plans to start car and battery manufacturing plants in the country since PM Narendra Modi met Tesla CEO Elon Musk in the US.

Also Read: Elon Musk Says Tesla Will Be Worth More Than Apple And Saudi Aramco One Day

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