India's commerce minister, Piyush Goyal, said on Wednesday that the government will introduce a new policy to attract electric vehicle (EV) manufacturers and encourage greater investment in the sector.
Goyal's comments come as US EV maker Tesla continues talks with the Indian government on the possibility of building a factory in the country.
Goyal said that the government would consult with the industry on the new policy, which he said would be aimed at attracting more investment and increasing domestic EV production as soon as possible.
"We will come out with a policy," he said. "As we get large-scale production, we will start enjoying the fruits of the economies of scale of new technologies."
Tesla's senior executives met with Goyal in August to discuss the company's plans for India. Tesla is reportedly interested in producing a low-cost EV priced at $24,000 for both the Indian market and export.
Goyal said on Tuesday that Tesla aims to source components worth between $1.7 billion and $1.9 billion from India this year, having bought $1 billion of components last year.
The Indian government is keen to promote the adoption of EVs as part of its efforts to reduce pollution and combat climate change. The government has set a target of 30% electric vehicle sales by 2030.
