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US-based electric vehicle maker Tesla is looking to source components worth around $1.9 billion from India this year against $1 billion last year, Commerce and Industry Minister Piyush Goyal said on Wednesday.

The minister said that going forward, demand for electric vehicles will increase and it will help in pushing the growth of the sector.

“Tesla already last year bought one billion dollars of components from I think all of you sitting here… I have the list of companies who supply to Tesla. This year their target is nearly $1.7 billion or $1.9 billion what they mentioned,” he said here at an event of auto component makers.

Earlier, the government had stated that it is not looking to frame a separate policy for providing incentives to Tesla, and the company can apply to avail support measures under existing schemes like PLI for auto and advanced chemistry cells.

The government has rolled out the production-linked incentives (PLI) schemes (PLI) for advanced chemistry cell (ACC) battery storage with an outlay of Rs 18,100 crore and Rs 26,058 crore PLI scheme for auto, auto-components and drone industries.

The world’s largest electric car producer Tesla Inc’s chief Elon Musk met Prime Minister Narendra Modi in June in New York.

Musk, after meeting the Prime Minister, said he plans to visit India in 2024.

When asked whether the government is considering duty concessions on completely built-up units to attract certain sections of electric cars into India, the minister said, “Everything we have done has been done equally without any differentiation, without any preferences.”

“This is the government which provides equal opportunity to everybody. So we will come out with a policy. A policy which will be in consultation with all the stakeholders—SIAM and ACMA—both will have a role in helping us draft a good policy,” he added.

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The government is continuously making efforts to attract newer investments and newer opportunities for the sector.

“Very clearly, we can see that going forward there will be a natural demand and an increasing demand or shift driven by an economic story by which we will see the electric auto industry grow,” he said.

The electric auto industry, he said, is growing worldwide and it will see that growth in India also.

He added that the demand gap between electric vehicles and other vehicles has reduced and “narrowed quite significantly”.

“My own sense is that going forward, that delta (gap) will get further squeezed and compressed,” he said adding in taxis, public transport, and buses, “we already see electric vehicles becoming a very compulsive investment case”.

“In this situation, we would like to see more investments and a larger production output in India of electric vehicles as soon as possible in the near future,” the minister said, adding with increasing demand and production, the Indian auto component industry will not only than produce for a larger India demand, but also export.

Citing some meetings with auto industry participants, he said players have indicated that they have an interest in coming to India.

“And therefore, I am convinced that this is the future and this is something we must try to attract,” Goyal said.

It will be a compulsive business case by 2030 for consumers to go in for electric vehicles and it will not be any by policy or artificial intervention.

When asked about foreign firms looking to invest in India as part of their China plus one strategy, Goyal said that global companies are coming to India because of its attractiveness.

“I totally debunk and reject the China plus one theory. That’s not what is going to drive India…India of today stands on its own feet. The India of today has offerings for the rest of the world… both for investment and trade,” he said.

Goyal added that India provides them good business environment, skills, managerial talent, a big market, and demand generated by 1.4 billion people.

“It’s a rules-based economy…, it’s a young democracy…..one of the fastest growing large economies. All of this makes it a compulsive investment destination.

“Therefore companies around the world have gone beyond the China-plus-one story, they have gone beyond the ABC philosophy of anything but China, they have gone beyond friend-shoring or near-shoring and are looking at India as a trusted partner,” he added.