Tesla has reportedly inked a strategic deal with Tata Electronics to source semiconductor chips for its global operations, highlighting the EV maker’s growing interest in India, beyond just generating local revenue.

What Happened: According to an ET report, the agreement was signed quietly a few months ago. The deal places Tata Electronics as a key supplier for leading global companies and strengthens India’s role in the semiconductor value chain.

While details of the deal are scarce so far, sources close to the agreement quoted by ET state that Tata Electronics has been consistently expanding its team, hiring 50-60 top-level expatriates to enhance its semiconductor technology and strategic operations.

The company has also established manufacturing facilities in Hosur, Dholera, and Assam, with plans for further expansion, supported by a $14 billion investment in its semiconductor business. This initiative is part of Tata’s broader effort to develop indigenous technology and leverage extensive global experience in the sector.

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Tesla’s India masterplan: Meanwhile, Elon Musk, Tesla’s CEO and chairman, is set to visit India to meet with Prime Minister Narendra Modi and is expected to announce investments in EV manufacturing facilities. This move comes as Tesla looks to penetrate India, the fastest-growing major automotive market globally.

Industry experts anticipate Tesla will invest $2-3 billion in India to produce electric vehicles, which currently hold a small but growing market share. Recent policy changes have reduced import duties for EVs priced over $35,000 to 15%, provided automakers commit to a $500 million investment in local manufacturing within three years. Tesla aims to introduce premium electric models and potentially manufacture entry-level cars locally.

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