Electric vehicle manufacturer Tesla has started talks with the Indian government to set up their first car factory in India. The proposal presented to the Indian government talks of building a factory with an annual capacity of manufacturing 500,000 electric vehicles. The prices of electric vehicles are expected to start from Rs 20 lakh onwards.

Tesla is also looking at India as an export hub as it is looking to manufacture their vehicles in India and then export the vehicles to other countries in the Indo-Pacific region.

"Tesla has come to us with an ambitious plan, and we are confident that the movement will be positive this time around, especially as it involves both local manufacturing and exports," said a source which was quoted by Times of India.

The move of Tesla considering to build a new factory India in spite of having a mega factory in China follows many other companies who have also opened factories in India as part of PM Modi’s ‘Make in India’ policy where multiple companies have been given the opportunity to make an investment in India in exchange of possible benefits.

Last month Indian Prime Minister Narendra Modi had urged billionaire and Tesla CEO Elon Musk to make a significant investment in India when he met him during PM Modi’s US state visit.

After the meeting, Elon Musk was quoted saying, "He (Mr Modi) really cares about India because he's pushing us to make significant investments in India, which is something we intend to do. We are just trying to figure out the right timing ... I am confident that Tesla will be in India and will do so as soon as humanly possible"

Executives of Tesla had also visited India and held talks with Indian bureaucrats and ministers in May on establishing a manufacturing base for cars and batteries in India.