NEW DELHI - A key executive who was leading Tesla's lobbying effort in India has resigned, weeks after the U.S. carmaker put on hold plans to sell electric cars in the South Asian nation, two sources aware of the matter told Reuters.

Manuj Khurana, policy and business development executive at Tesla in India, was hired in March 2021 and played a key role in forming a domestic market-entry plan for the U.S. carmaker in the country.

He lobbied the Indian government for more than a year to slash the import tax on electric cars to 40% from as high as 100%, a move Tesla said would allow it to test the market with imports from its production hubs like China before investing in a factory.

But Prime Minister Narendra Modi's government insisted Tesla must first commit to manufacturing cars locally before it can offer any concessions. With talks deadlocked, Tesla put its plans to sell cars in India on hold, reassigned some of the domestic team and abandoned its search for showroom space.

Neither Khurana, the company's first employee in India, nor Tesla responded to requests for comment. An email sent to Khurana generated an automated reply saying the address was no longer valid and future emails would not be received.

"Tesla's plans to launch in India right now are as good as dead," said one of the sources.

The sources wished to remain anonymous because the resignation had not yet been made public.

Tesla Chief Executive Elon Musk said on Twitter last month that the company would not set up manufacturing in any location where it was not allowed first to sell and service cars.

The carmaker has also shifted its focus to other markets in Southeast Asia, like nickel-rich Indonesia, where it is looking at a potential battery-related investment, as well as Thailand, where it recently registered a local unit to sell cars.

(Reporting by Aditi Shah and Aditya Kalra; Editing by Bernadette Baum)