Elon Musk’s recent hint about Tesla’s “natural progression” into the Indian market could be a big signal of the electric car maker’s imminent entry into India.

What Happened: Musk’s comment came as a response to media reports stating that Tesla had begun scouting for a location in India to establish its factory. News wire agency ANI, citing sources, went on to add on Sunday that Maharashtra and Gujarat have reportedly rolled out enticing land offers, with Telangana also joining the conversation.

"The natural progression is to provide Tesla electric vehicles in India," Musk said in a statement to Reuters.

What to know: Projected to inject between $2 billion to $3 billion into the venture, Tesla aims to satisfy local and global electric car appetites. This move aligns seamlessly with India’s fresh-off-the-press EV policy, setting the stage for Tesla’s grand entrance.

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The government’s EV blueprint is ambitious, aiming to entice leading global EV players, spur the adoption of top-tier EV tech among Indian buyers, and boost the ‘Make in India’ campaign. With a substantial investment requirement pegged at around $500 million, the policy nudges manufacturers towards substantial domestic sourcing — starting with 25% of parts locally sourced within three years, escalating to 50% by year five.

For those rolling out vehicles with a price tag of $35,000 and upwards, a 15% customs duty awaits, provided they set up shop in India within a three-year window. The policy also caps the number of EV imports relative to investment, with a ceiling of 40,000 vehicles, subject to an annual limit of 8,000.

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