After multiple rounds of negotiations, it appears that the government is now willing to decrease import duties for EVs in India. According to a Financial Times story, India is considering lowering import levies on electric automobiles. According to reports, the US EV manufacturer intends to establish a manufacturing facility in India.
In India, completely built-up (CBU) automobiles priced under $40,000 pay a 70% import charge, while those priced beyond $40,000 suffer a 100% import duty. According to the article, the government is considering lowering it to 15% for all electric vehicles. However, the report underlines that the administration has yet to agree on this policy adjustment.
According to a statement obtained by the Financial Times from a source familiar with the situation, "their opinion has always been that they require some tariff concessions, at least in the interim time... It would include a sunset clause."
"We want to create a package that is good for India and does not become a curated package for one company," said another insider. Others are welcome to take advantage of this window as long as they match the requirements."
According to Reuters, Tesla CEO Elon Musk is scheduled to meet with Commerce and Industry Minister Piyush Goyal. According to reports, Goyal and Musk will discuss India's new policy, which would allow automakers to import fully manufactured EVs into India at a 15% tax rate, down from 100%. Notably, this policy is still being developed.
Tesla abandoned its aspirations to enter the Indian market in 2021 due to unproductive talks with the Indian government on import charges. The government pushed on local manufacturer and promised additional perks in exchange. Tesla was also encouraged by the government to apply for the production-linked incentive plan. According to the article, the upcoming meeting will verify that the talks are on track.
