Tesla CEO Elon Musk(Left) and Indian PM Narendra Modi(Right) / X-@narendramodi

Tesla CEO Elon Musk has postponed his highly anticipated visit to India, during which he was scheduled to meet with Prime Minister Narendra Modi and various startup founders.

In a post on X (formerly Twitter), Musk attributed the delay to "very heavy Tesla obligations" but expressed his eagerness to reschedule the visit later in the year.

Unfortunately, very heavy Tesla obligations require that the visit to India be delayed, but I do very much look forward to visiting later this year.

— Elon Musk (@elonmusk) April 20, 2024

Musk’s postponement coincides with recent consultations conducted by the Indian government with representatives from the automobile industry, including Tesla, to discuss the implementation guidelines for the new Electric Vehicle (EV) policy released last month. The policy aims to provide clarity on investment opportunities in EV manufacturing, which is still in its nascent stage of development in the country.

Under the new EV policy, Tesla stands to benefit from reduced import duties for cars imported into India. The policy allows for a 15 percent import duty on completely built-up (CBU) cars, fulfilling Tesla's previous request for tariff concessions as a prerequisite for establishing a manufacturing plant in India.

India, currently the world's third-largest automobile market, is witnessing rapid growth in its automotive sector. With the current market size at US$14.9 million and projected to exceed US$29.8 million by 2030, the automotive industry contributes over 7.1 percent to the country's GDP.

Initially scheduled to meet with Prime Minister Modi early next week, Musk also intended to engage with senior officials from state governments where Tesla is considering establishing an electric vehicle assembly unit, as well as executives from space-tech startups. The billionaire had expressed his anticipation for the meeting with PM Modi via Twitter on Apr.10.

Speculations were rife that Musk would utilize the occasion to announce an investment of $2-$3 billion in India, primarily for the construction of a new factory. In response, PM Modi emphasized the importance of investments in India that involve local labor, reflecting the essence of the nation's culture and creating employment opportunities for Indian youth.

Musk's visit was planned following the Indian government's recent announcement of a new electric vehicle policy, which offers import duty concessions to companies establishing manufacturing units in the country with a minimum investment of $500 million. This initiative aims to attract major global players like Tesla.

As per the policy, companies setting up manufacturing facilities for electric passenger cars will be permitted to import a limited number of vehicles at a reduced customs/import duty of 15 percent for cars priced at $35,000 and above, for a duration of five years from the issuance of government approval.