As Elon Musk refuses to listen to India's demand to manufacture Tesla cars in the country, Japanese automaker Suzuki Motor is set to invest about 150 billion yen ($1.26 billion) to produce electric vehicles (EVs) and batteries in India, media reports said on Saturday.
According to Nikkei Asia, Japanese Prime Minister Fumio Kishida is set to visit India over the weekend to meet his Indian counterpart Narendra Modi and the announcement will be made during the visit.
Japan is set to offer India $42 billion in overall investments over five years during Kishida's visit, the report noted.
Suzuki will build a new electric vehicle production line in India.
Reports first surfaced last year that Suzuki Motor will release its first all-electric vehicle by fiscal 2025 in India first.
Nikkei had reported that the first EV model will be made available for 1.5 million yen ($13,700) or less, after government subsidies are taken into account.
India has a goal of making 30 per cent of newly-sold cars to be electric by 2030. To achieve that, the government has offered incentives to purchasers of EVs worth $1.3 billion over a three-year period, starting 2019.
The Indian government had in June last year decided to extend the incentive measures for two more years.
Suzuki has a market share of about 50 per cent in India. The company is also building a battery plant in India with Denso, a car parts maker.
The investment comes as Tesla's entry in India has been delayed over a tussle with the Indian government to reduce Customs duties. Musk has also not responded to India's call to manufacture Tesla in the country.
Last month, Union Minister for Road Transport and Highways, Nitin Gadkari, had said that manufacturing Tesla in China and selling in India is not a digestible concept.
Stressing that Musk has to manufacture here first in order to roll out Tesla cars on the roads, the Minister said: "Now his (Musk's) interest is to manufacture the Tesla car in China and sell it in India.
"So, if you start here, you are welcome, no problem. But manufacturing in China and selling in India is not a digestible concept to all of us."
When asked about Tesla's demand to cut Customs duties on electric cars, Gadkari said that the country cannot appease one automobile company.
"India is a huge market. We have all the world's automobile giants -- BMW, Volvo, Mercedes-Benz, Tototo, Honda, Hyundai -- present here. If we give benefit to one company, we have to give that benefit to other companies as well. That is the practical problem," he elaborated.
Musk recently tweeted that he faced challenges from the government for releasing its products in India.
"Tesla isn't in India yet due to 'Challenges with the government'," he posted.