India is mulling over tax cuts for imported fully-built electric vehicles, aiming to lure companies like Tesla to sell and eventually produce cars within the country.
The government is drafting a policy that would grant international carmakers reduced duty rates for importing electric vehicles if they commit to manufacturing them in India down the line.
Details of the policy are still in discussion, with representatives from concerned ministries yet to comment.
Tesla, based in Austin, had previously sought reduced import duties, aiming for rates as low as 40% from the current range of 70%-100% for its electric vehicles.
Elon Musk, Tesla's CEO, is expected to meet with Indian Trade Minister Piyush Goyal soon to discuss plans for establishing a factory in India.
Image Source: Bloomberg
This move aligns with India's goal of increasing manufacturing in the GDP and generating employment opportunities, while Tesla eyes India's growing electric vehicle market.
Currently, electric cars account for a mere 1.3% of total passenger vehicle sales in India due to high costs, limited options, and inadequate charging infrastructure.
Opening up the electric vehicle sector could accelerate cleaner transportation adoption in a country grappling with severe air pollution.
India had initiated a $3.1 billion incentive program in 2021 to bolster local electric vehicle production.
Moreover, India is contemplating reducing import taxes on certain electric vehicles from the UK as part of negotiations for a free-trade agreement with Britain.
This move signals India's broader efforts to encourage the use and production of electric vehicles in the country.
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