Modi govt. planning to slash EV import taxes from 100% to 15% following Tesla’s proposal! According to a report on Friday, the government is mulling over possible import tax cuts for electric vehicle (EV) manufacturers ready to set up their production facilities in the nation as a result of Tesla’s growing interest in the Indian market. According to sources cited by Reuters, the action intends to significantly advance Prime Minister Narendra Modi’s intention to dramatically increase the country’s EV production capacity.
If automakers agree to produce at least 40% of the vehicles domestically, the government may reduce the import levy on electric vehicles (EVs) from 100% to 15%, according to sources cited by Reuters.
The action is perceived as an effort to entice Tesla and other major automakers to establish production facilities in India. Since more than a year ago, Tesla has been in discussions with the Indian government about entering the market but has been hesitant to do so because of the high import taxes.
It is unclear when the new policy will go into effect because it is still being finalized. Although this action is considered a start in that direction, the government is eager to make India a significant hub for the manufacture of EVs.
By 2030, the government wants to see sales of electric vehicles reach 30%. The government is providing tax benefits, subsidies, and the development of a charging infrastructure to EV buyers and manufacturers in order to meet this goal.
According to a source cited by Reuters, the lower import duties may make it easier for Tesla to sell all of its models in India rather than just the new vehicles it plans to produce there.
Similar actions have been taken by other nations to encourage EV manufacturing commitments. To entice Chinese players and Tesla, Indonesia, for instance, has offered to decrease import duties from 50% to zero for EV makers contemplating investments.
More recently, Tesla has expressed interest in establishing local manufacturing and producing a new EV with a starting price of roughly $24,000, or about 25% less than its current entry model, for the Indian market as well as for export.
Rohan Patel, senior public policy and business development executive at Tesla, has recently had private meetings with high officials regarding plans for India. Prime Minister Narendra Modi, who met with CEO Elon Musk in June, has been closely monitoring developments, according to Reuters.
According to sources cited by Reuters, Tesla assured Indian officials that possible manufacturing there might run at full capacity by 2030.
Tesla proposed a low import tax that would be conditional on a manufacturing commitment, but Indian officials made it clear that there would be no special incentives for the company to enter the market.