New Delhi:

Elon Musk will visit India this month and Reuters reports that the Tesla CEO may announce investment plans to produce electric vehicles (EVs) in the country. The announcement will be a shot in the arm for New Delhi’s efforts to become a key investment hub in the electric vehicle industry.

Western efforts to block Beijing from flooding the global market with low-priced electric vehicles could spur Indian industry, experts told New Delhi TV.

Nimish Trivedi, CEO and Co-Founder, Prakriti E-Mobility, said: “As the US and Europe aim to curb Chinese electric vehicle imports, India is emerging as a strong contender as a top investment destination. India’s rapid development is driving this trend .The electric vehicle market continues to grow and is expected to account for more than 40% of the entire automotive market by 2030, with revenue exceeding $100 billion.”

Musk is also reportedly evaluating the possibility of a joint venture with Reliance Industries. Tesla’s CEO is expected to meet Indian Prime Minister Narendra Modi later this month.

The reports come at a critical time, days after U.S. Treasury Secretary Janet Yellen concluded a four-day visit to China by warning Beijing to scale back electric vehicle production to avoid flooding the market and threatening U.S. companies that would otherwise Facing possible import tariffs from Washington.

“China is now too big for the rest of the world to absorb such huge production capacity. Actions taken by the People’s Republic of China today could change world prices. The ability of U.S. and other foreign companies to survive when global markets are inundated with artificially low-priced Chinese products questioned,” Ms. Yellen said earlier this week.

Trivedi said the possible tariffs imposed by the United States on low-priced Chinese electric vehicles provide a great opportunity for the Indian electric vehicle industry.

“As Chinese EVs become more expensive globally, U.S. consumers may seek alternatives, opening the door for Indian EV exports to the U.S. and boosting domestic production. Additionally, if the overall competitiveness of Chinese EVs declines, India EV companies are likely to face less competition domestically, leading to higher sales and market share,” Trivedi told New Delhi TV.

A surge in global electric vehicle consumption, driven by environmental concerns and rising fuel prices, could further cement India’s position as an EV export hub. The surge in EV adoption can be seen in the 2023 sales figures for electric two-wheelers and four-wheelers.

Mr Trivedi explained: “Global trends show that the adoption of electric vehicles is expected to increase by 24% by 2028. This presents huge opportunities for India, not only domestically but also as an export hub. China and India The narrowing cost gap between manufacturing industries, coupled with the growing presence of Indian original equipment manufacturers (OEMs) in key markets such as Latin America and Africa, puts India in a strategic position for auto component exports.”

Impact of geopolitical tensions with China

However, experts say geopolitical tensions with China could pose a threat to India’s status as an EV hub. Gunjan Singh, an associate professor at Jindal Global University and an expert on China, explained that the unresolved territorial dispute between the two Asian neighbors and the heavy reliance of American companies on Chinese components could put India in trouble.

“China has previously weaponized raw material supplies to put pressure on the West. This could put India in a difficult situation. However, in this case, this is unlikely to happen as the Chinese economy is equally dependent on products from the Western market,” Ms. Singh noted.

“The dispute between India and China means that the two countries inherently do not trust each other. This means that while India will continue to be an important market for China, and become more important due to the restrictions of the US market, it currently does not appear to be Like China.” “India is a hub for investments in India. Geopolitical tensions between India and China are hampering Chinese investments in India,” she added.