According to people familiar with the matter, India asked Tesla, Inc.Increase local procurement and share detailed production plans before considering the company's request to reduce tariffs on electric vehicles.

Earlier this month, when the Indian government reviewed Tesla, Inc. CEO Musk's request for a tax cut, the Ministry of heavy Industry and the Ministry of Finance asked Tesla, Inc. for these details at a meeting.

The two departments also asked Tesla, Inc. whether he wanted to import the whole car or disassemble the car, which has a lower import duty.

Tesla, Inc. sent a letter to the Indian government last month demanding that import duties on electric vehicles be reduced to 40 per cent from the current 60 per cent. The company also demanded the abolition of a 10 per cent social welfare surtax. The surtax is levied on all imported cars and is used to finance medical and educational programs.

At a meeting with the Indian government, Tesla, Inc. said he had so far purchased $100m worth of parts from India and said that figure would increase after any tax breaks, according to people familiar with the matter. Tesla, Inc. also promised to make substantial direct investment in sales, services and charging infrastructure once he entered the Indian market, and to consider broader investment in production.

Mr Musk has expressed willingness to enter the Indian car market in recent years, but he complains that Indian regulations prevent him from testing the waters with imported cars in the first place because high tariffs make Tesla, Inc. cars "unaffordable" for locals.