India, Tesla near pact on EV import, factory

India is closing in on an agreement with Tesla Inc. that would allow the US automaker to ship its electric cars to the country from next year and set up a factory within two years, according to people familiar with the Indian government’s thinking.

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An announcement could come at the Vibrant Gujarat Global Summit in January, one of the people said, declining to be identified because the discussions are private. The states of Gujarat, which is Prime Minister Narendra Modi’s home base, Maharashtra and Tamil Nadu are under consideration because they already have well-established ecosystems for electric vehicles and exports, another person said.

Tesla would commit an initial minimum investment in any plant of around $2 billion, one person said, and would look to increase purchases of auto parts from the nation to as much as $15 billion. The US automaker would also seek to make some batteries in India to bring down costs, the person said.