The electric-vehicle maker will focus its hunt on Indian states with automotive hubs such as Maharashtra, Gujarat and Tamil Nadu

One of the primary motivators for India to reduce the EV import tax had been Tesla’s interest in building a factory in India

India has emerged as one of the biggest destinations for global investments as firms across the globe rush to diversify their supply chains from China

The move is part of VinFast’s increasing efforts to expand its overseas footprint, while for India its a boost for the country's efforts to get EV makers to manufacture at home

Elon Musk has reportedly demanded the concession in return for building a new production plant in a car market dominated by low-cost vehicles

New Delhi will move slowly in considering the tax cut as any lowering of taxes on imported EVs could disrupt the market and upset local players, sources said

"Security concerns with respect to Chinese investments in India" led officials to decline the EV-maker's proposal, a report by the Economic Times said

This will be Tata’s first gigafactory outside of India and will have the capability to produce an initial output of 40 gigawatt hours

India is concerned that tie-ups like the one proposed by BYD are “controlled by the foreign partner” and reduce the partnering Indian company to a “dummy entity”

The investment proposal also includes a plan by BYD to set up charging stations in India and build research and development and training centres

Musk says it's "quite likely there will be a significant investment in our relationship with India in the future,” adding that he thinks "India has more promise than any large country in the world"

Musk's comment represents a shift in stance for Tesla, which saw talks with the Narendra Modi-led government hit a deadlock last year