Tesla Enters Indian Market with First Showroom in Mumbai Amid Regulatory and Pricing Hurdles
Tesla will officially make its long-anticipated debut in India on July 15 with the opening of its first showroom, or “experience centre,” in Mumbai’s high-end Bandra Kurla Complex. The 4,000-square-foot facility at Jio World Drive will showcase the Model Y SUV, shipped from Tesla’s Shanghai Gigafactory, signaling a new chapter for the EV maker in one of the world’s most competitive and price-sensitive auto markets.
This entry follows years of protracted negotiations with Indian authorities over high import tariffs and demands for local manufacturing. India imposes a steep 70% duty on fully built imported electric vehicles priced under $40,000, and 100% for vehicles priced above that threshold. As a result, each imported Model Y, valued at around ₹27.7 lakh ($31,988) according to customs data, incurred duties exceeding ₹21 lakh ($24,000), pushing its estimated pre-tax, pre-insurance retail price in India to over $56,000. By comparison, the same model sells for $44,990 in the United States.
Despite the cost burden, Tesla has moved ahead with a brick-and-mortar retail presence, leasing the Mumbai location at an annual rent reportedly starting at ₹3.7 crore ($443,000). A second showroom is planned for New Delhi, accompanied by the rollout of Tesla’s proprietary Supercharger network.
Between January and June 2025, Tesla imported around $1 million worth of vehicles, accessories, and charging infrastructure, primarily from China and the U.S. The six imported Model Y units were individually valued between $32,500 and $46,000.
However, Tesla’s market entry remains incomplete without a firm commitment to local manufacturing. Despite India’s new electric vehicle policy, which offers reduced import duties for companies investing a minimum of $500 million in domestic production, Union Minister H.D. Kumaraswamy confirmed last month that Tesla has not expressed intent to manufacture in India. He noted the company’s current objective is limited to selling imported cars through retail showrooms.
Behind the scenes, Tesla has quietly been building operational infrastructure. It has leased office space in Bengaluru and Pune, and warehousing facilities in Haryana and Karnataka. A new service centre has been established in Kurla, Mumbai. Tesla has also begun hiring staff across sales, support, and service functions to support the retail launch.
India’s EV market, though expanding, is still in early stages with electric vehicles making up just over 5% of new car sales. Tesla’s premium positioning and high import costs could limit its immediate customer base, especially given that Indian consumers are highly price-conscious and domestic competitors like Tata Motors and Mahindra are pushing aggressively into the affordable EV segment.
Tesla’s India operations are currently being managed by its China-based team, reflecting a transitional leadership phase following the departure of India lead Prashanth Menon. The move into India also comes at a time when Tesla is facing global headwinds, including excess capacity at several Gigafactories and softening demand in key markets such as North America and Europe.
The showroom launch reflects a strategic recalibration for CEO Elon Musk, who had previously resisted entering the Indian market without tariff concessions. While the showroom marks a significant milestone, the absence of a long-term manufacturing plan and the high cost of Tesla vehicles may pose serious challenges to Tesla’s ability to scale in a market that demands both affordability and localization.