According to industry insiders and analysts, the primary reason for the billionaire's decision to postpone his visit is the ongoing elections in India. Prime Minister Narendra Modi is currently focused on campaigning and unable to unveil any new economic policies offering incentives to Tesla for its manufacturing programme in India.

It was anticipated that Musk would reveal details about establishing a manufacturing facility in India following Delhi's recent announcement of reduced import duties on specific electric vehicles. This policy applies to companies willing to invest a minimum of US$500 million in manufacturing plants within a three-year timeframe.

Just before Musk's highly awaited trip to India, he decided to cancel his visit. Musk mentioned in a post on X (formerly Twitter) on April 20 that due to significant Tesla commitments, he has to postpone his visit to India. However, he expressed eagerness to visit later in the year. According to some US based analysts. Musk was advised by his policy consultants to visit India after the Lok Sabha elections and the formation of a new government.

Though the general view in U.S. media is that the Prime Minister Narendra Modi is coming back with comfortable majority in the Lok Sabha elections, some of the ace political strategists who have been monitoring the Indian elections, took note of a anti-BJP trend in the first phase of polls on April 19. Sources said that the Musk advisers analysed the initial reports and advised the Tesla chief to postpone the visit till a new government is formed.

Following Musk's announcement on postponement, opposition Congress Party leader Jairam Ramesh took to social media to express his view that it was strange for Elon Musk to travel to India to meet a Prime Minister who is on the way out. Ramesh suggested that Musk, too, had recognized the prevailing situation and chosen to postpone his visit.

The Prime Minister of Indian National Developmental Inclusive Alliance (INDIA) will extend a warm welcome to Musk in the near future, and the INDIA'n government plans to intensify its promotion of electric vehicles even further - I personally use one myself! The term "INDIA" refers to a coalition of opposition parties that are contesting against Modi's ruling Bharatiya Janata Party (BJP).

Musk's choice has caused BJP supporters to wonder if he had advance knowledge of the election outcome, which differs from the predictions of various surveys forecasting the BJP's victory. The election results are expected to be announced on June 4.

During a press conference, Finance Minister Nirmala Sitharaman stated that the government aims to create an appealing environment for large companies looking to invest in India."Given the rising concerns about China among various industries and experts in specific fields, we have crafted policies to position India as an appealing destination for both manufacturing and services."

Although analysts were initially taken aback by Musk's choice, they concurred that Tesla would establish operations in India, a country that surpassed Japan to become the world's third-largest automobile market in 2022.

Puneet Gupta, the director of mobility at S&P Global, highlighted the importance of Tesla tapping into the Indian market to increase sales, especially as the company's profitability has been declining due to price cuts aimed at capturing a larger market share. This insight was shared in a report by the SCMP media house.

To establish a solid presence in the Indian market quickly and effectively, Gupta recommended that Tesla should aim to scale up rapidly. He also suggested that Tesla might consider partnering with a local entity to minimize risks. According to Gupta, Tesla would benefit from partnering with a local company to navigate the complexities of launching operations in various Indian states. He also mentioned that Tesla might be evaluating potential policy changes by the upcoming Indian government.

Experts noted that India represents an attractive market opportunity for Tesla. Elon Musk had previously mentioned that India's high import taxes were a barrier to Tesla's car sales in the country. As a result, Delhi responded by implementing reduced taxes specifically for electric vehicle manufacturing, aligning with Musk's perspective.

Tesla announced on Tuesday, April 23rd, its intention to speed up the release of more affordable vehicles and begin manufacturing new models earlier than initially planned, moving up the timeline from late 2025.

Analysts suggest that although Tesla may eventually launch a budget-friendly model in India, initially, the company might import its current models into the market upon entry.

According to Suraj Ghosh, an independent auto analyst, Tesla would have to establish a presence in India regardless of the specific car models being offered."India is a crucial and rapidly expanding market, and Tesla will need to establish a presence here eventually. India is poised to become a significant manufacturing center and a key sales destination," he commented.

Ghosh mentioned that Tesla is likely to reveal its intention to establish a factory in India after accepting the tax benefits provided by the new electric vehicle policy. With its manufacturing base established, Tesla could potentially enter the luxury car segment in India, as suggested by Ghosh. He noted that Tesla's vehicles are expected to be priced in the range of 3.5-4 million Indian rupees (equivalent to US$42,000 to US$48,000), allowing the company to carve out a favourable market position.

According to analysts, as Tesla enters India's electric vehicle market, competition is expected to intensify. Local manufacturers like Tata Motors may lower prices by leveraging decreasing battery costs and incentives from Delhi linked to productivity.

Ramesh K. Vaidyanathan, managing partner at law firm BTG Advaya, shared with SCMP media house that Musk's choice is prudent given the government's focus on the election and regulations prohibiting significant policy declarations by politicians. Vaidyanathan anticipates a competitive battle among Indian states to attract Tesla for establishing its manufacturing facilities.

Tesla's decision to invest in India will be a significant and impactful announcement for clear reasons. (IPA Service)