You have to wonder if Elon did it on purpose. It could be just a tactic where India demanded something outlandish and then Musk pulled this. You know Indians are probably demanding everything be sourced in India especially the batteries and that will probably be more expensive for Tesla. A Tesla factory is probably more important to India than it is for Elon.
Everyone talks about India being cheaper than China.
When you think about it, Indian may actually be more expensive when looking at the whole picture.
As I have previously shared, modern manufacturing is a very complex process that has hired industrial engineering experts to optimize complex processes to be as efficient as possible. Companies choose China because the entire supply chain and ecosystem can be placed in China and done efficiently at a cost effective price with people who can problem solve as required.
You try the same in India thinking it's cheaper and suddenly you realize all these other costs are adding up. From needing to source via insufficient suppliers, quality callbacks, redtape delays, needing to bribe authorities to get anything done etc. After all this, you suddenly notice your costs are actually quite high and your profits are quite low but it's too late by then.
China has really spoiled companies. They got into China and lucked out because China has a disciplined workforce who are smart enough to do things for a low price. They don't realize this is the exception not the rule and they simply are not gonna get luck on this scale again no matter what they dream.
But ultimately China can't really force them to not pick India. So if they decide to go through with it and it doesn't work out, they should own the responsibility and not push it to someone else.