India woos Tesla with offer of lower costs

India says it will offer incentives to ensure Tesla's cost of production in the country would be less than in China.

The country's transport minister told Reuters it would be in return for Tesla making its vehicles there.

His pitch comes weeks after Elon Musk's pioneering car firm registered a company in India.

Sources familiar with the matter have said Tesla plans to start by importing and selling its Model 3 electric sedan.

But Nitin Gadkari told Reuters that Tesla should "make the entire product in the country by hiring local vendors".

Adding that India would then give higher concessions, although he didn't give any details on what they would be.

He did however say that India would make the production costs for Tesla lower than in China.

India wants to boost local manufacturing of EVs, batteries and other components to cut costly imports and curb pollution in its major cities.

But India faces a big challenge to win a production commitment from Tesla.

The country's fledgling EV market is still a long way behind China, where Tesla already makes cars.

Just 5,000 electric vehicles were sold in India last year, versus over 1 million new energy cars in China.

The automaker did not immediately respond to an email requesting comment about its plans for India.