For industry experts, it is common knowledge that Tesla is looking to expand their production by building more factories and some of them may have to be in foreign countries. Tesla currently only operates their Fremont factory and the production is nearing maximum capacity and with very little room for expansion. Experts believe that factory may be able to produce 1 million cars a year. That number is quite short to the 6 million that Elon Musk has recently said that his company will be building annually.
India is projected to become the world's third largest automobile market soon and its government has recently announced plans that all new car sales in the country must be electric by 2030. And while that goal may seem quite lofty and more inspirational than practical, it is actually the perfect timing for India to have set this goal. The country is still lagging far behind in modernization in comparison to the Western world, but the country has seen recent developments which will help create that middle class that will fuel the country's growth. While most developed countries have a major combustion engine market, the same market in India is not as big since not a lot of people can afford cars at the moment. Since Tesla manufactures only electric cars, the company expanding into India is only the next logical move.
However, before making any investments in a new factory, Musk would like to test out the market in India first to see if his products appeal to Indian consumers. And he wants help from the government to accomplish his goals. He has tweeted requesting for temporary relief on import penalties/restrictions until a local factory is built. So why would India relax their import tariffs for only one company and not others? Well, the simple answer is the company and the country are aligned in the same philosophy and goals, plus luring Tesla to build a new factory will create thousands of jobs for the country.