Tesla is considering setting up an assembly unit in India, says a report from Money Control, which cites sources aware of the matter. What’s interesting is that such a report follows a recent visit by Indian PM Narendra Modi to Tesla’s factory.

Tesla Planning Assembly Unit In India [REPORT]

Assembly unit for Tesla Model 3

Tesla is considering the assembly unit for its upcoming Tesla Model 3, the report said. The U.S. firm is also in talks with Indian authorities to rationalize the import duty imposed on the electric cars, and seeks to develop a separate category for the electric vehicles. The Indian PM Narendra Modi recently visited Silicon Valley and met Tesla CEO Elon Musk. The discussion could have triggered the above talks, according to speculations. Musk was very impressed with Modi’s “Make in India” pitch.

Tesla’s assembly unit in India is expected to act as a gateway for Tesla’s Asian markets, but a full-fledged manufacturing unit could still be far off for now. Tesla, in its initial market research, found India to be its hub in Asia, the report said. The company plans to launch the Tesla Model 3 in India. Currently, the Model S is sold in only two Asian countries – China and Japan.

Gigafactory work in progress

Meanwhile, Tesla is progressing with its gigafactory construction. The Reno Gazette-Journal, citing building permits, says that work is now underway in the factory’s interiors and an on-site data center. On completion, the gigafactory’s floor space will be 10 million square-feet. In the last four months, Tesla has applied for more than 20 permits.

The automaker recently acquired a permit for architectural interiors, and the value of the work is estimated at $10 million. The company expects to wrap up construction by February 2016. Tesla has also stopped listing subcontractors on the permits and has acquired a contractors’ license of its own.

For Tesla, the so-called gigafactory is very important in hitting its goal of making 500,000 electric vehicles per year and to offer the more affordable $35,000 Model 3 car, which is expected to hit the markets in 2017.

On Tuesday, Tesla shares closed down 1.91% at $241.46. Year to date, the stock is up by almost 9% while in the last year, shares are down by over 5%.