On Jan 13, 2021, Elon Musk had tweeted that he was still working through a lot of challenges with the government for setting up manufacturing units for his Tesla electric cars in India. "Still working through a lot of challenges with the government," the billionaire wrote in a post sharing an update to a query regarding Tesla's India business plan.
The central government has already invited Tesla to set up local manufacturing units in India. Top government officials have also asserted that Tesla will only be able to get advantages under the production-linked incentive (PLI) scheme if the company manufactures locally. Hence, local manufacturing does not seem to be part of Tesla's "challenges with the government". Tesla had requested the Union government to standardise the tariff on electric cars to 40%, irrespective of Customs value, and withdraw the social welfare surcharge of 10% on such vehicles. The Union Heavy Industries Ministry had asked the electric car major to commence manufacturing EVs in India before tax concessions could be considered by the Indian government.
Yet, several state governments have requested Tesla to set up a manufacturing unit for its electric cars in their states. Ministers representing states such as Telangana, Punjab, West Bengal, Tamil Nadu, and Maharashtra invited Elon Musk to build a local manufacturing unit in a bid to help Tesla overcome these "challenges". When Telangana Industry and Commerce Minister K.T. Rama Rao sent that invite to Tesla CEO Elon Musk to set up shop in the state, he was hailed by many including leading journalists, entrepreneurs. State water resources minister Jayant Patil wrote to Tesla CEO Elon Musk on Twitter as well.
Earlier in December 2021, the Indian government issued an advisory stating that Elon Musk's Starlink had not obtained any license or authorization mandated to operate its satellite internet services in the country. Starlink satellite internet service has met its first setback in India even before the commercial launch- the company’s country director and chairman of the board, Sanjay Bhargava, has stepped down citing personal reasons.