Indian News

India Mulls Tax Cuts on Electric Vehicle Imports to Attract Tesla and Other EV Makers

India is reportedly considering tax cut options on the imports of completely built units of electric vehicles (EVs) to attract international EV manufacturers, including Tesla. The proposed tax cuts could extend for up to five years if EV makers commit to eventually manufacturing their cars in India. The Indian government is working on an electric vehicle policy that would allow international car manufacturers to import battery-powered vehicles at concessional duty rates if they commit to local production in the future. Tesla had sought duty cuts on EV imports as part of its plans to enter the Indian market.

Tesla is reportedly lobbying for a reduction in import duty to 40 percent from the current range of 70-100 percent for its vehicles, depending on their import value. Elon Musk, Tesla’s CEO, is likely to meet Indian Trade Minister Piyush Goyal to discuss the company’s plans to set up a factory in India. India is looking to attract Tesla’s investment to boost the country’s manufacturing sector and create jobs. The government has launched a $3.1 billion incentive program to boost local electric vehicle production.

India’s electric car market is still at a nascent stage, accounting for just 1.3 percent of total passenger vehicles sold last year. The adoption of EVs in the country faces challenges such as high car costs, limited options, and a lack of charging infrastructure. The government’s efforts, including incentives and policy changes, aim to accelerate the adoption of electric vehicles in a country with significant air quality challenges.

India is also considering reducing import taxes on some electric vehicles from the UK as part of negotiations with Britain over a free-trade deal.

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