Tesla is launching its plans to enter the Indian market, signaling a significant shift in the country’s automotive landscape. CEO Elon Musk recently met with Prime Minister Narendra Modi.

The company is actively recruiting for key positions and scouting locations for showrooms in major cities like Mumbai, Delhi, and Bangalore, with plans to commence sales in the third quarter of 2025.

This has caused unease among local automakers, who are concerned about retaining affluent customers despite Tesla’s potential market entry.

The Indian electric vehicle (EV) market faces challenges, including high vehicle prices and insufficient charging infrastructure.

Tesla’s advanced technology could give it an edge, but high import duties may push prices to around 3.5 million rupees ($40,377), compared to an average of 1.2 million rupees for Indian cars.

In response to these challenges, the Indian government has introduced a new EV policy to attract foreign automakers like Tesla.

The policy offers reduced import tariffs for companies investing in local manufacturing, requiring a minimum investment of $500 million.

However, only 5% of this investment can be allocated to charging infrastructure, emphasizing the government’s focus on vehicle production.

Financial markets have reacted to Tesla’s impending entry. Indian auto stocks experienced minor gains, with the Nifty 50 rising by 0.13% and the BSE Sensex increasing by 0.24%.

Financial stocks gained 0.3% after a 2% slide over the previous three sessions. However, market sentiment remains cautious due to global trade uncertainties and concerns over increased competition.