Tesla Inc has put on hold plans to sell electric cars in India, abandoned a search for showroom space and reassigned some of its domestic team after failing to secure lower import taxes, three people familiar with the matter said.

The decision caps more than a year of deadlocked talks with government representatives as Tesla sought to first test demand by selling electric vehicles (EVs) imported from production hubs in the US and China, at lower tariffs.

But the Indian government is pushing Tesla to commit to manufacturing locally before it will lower tariffs, which can run as high as 100% on imported vehicles. Tesla had set itself a deadline of February 1 to see if its lobbying brought a result, the sources with knowledge of the company’s plan said. When Narendra Modi’s government did not offer a concession, Tesla put on hold the plans to import cars into India, added the sources, who sought anonymity because the deliberations were private. Source: Reuters