New Delhi : Tesla has put on hold plans to sell electric cars in India. , 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 United States and China, at lower tariffs.

But the 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, the day India unveiled its budget and announced tax changes, to see if its lobbying brought a result, the sources with knowledge of the company's plan told Reuters.

When the 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.

For months, Tesla had scouted for real estate options to open showrooms and service centres in New Delhi, Mumbai and Bengaluru but that plan is also now on hold, two of the sources said.

As recently as January, chief executive Elon Musk had said Tesla was "still working through a lot of challenges with the government" in regard to sales in India.

The government has sought to lure manufacturers with a "Make in India" campaign. Transport minister Nitin Gadkari said in April it would not be a "good proposition" for Tesla to import cars from China to India.

But New Delhi had clinched a win in January, when German luxury carmaker Mercedes-Benz said it would start assembling one of its electric cars in India.

Tesla had looked to gain an early advantage in India's small but growing market for electric vehicles, now dominated by domestic automaker Tata Motors.