India Mulls Cuts In Import Duty On Fully Built EVs For Companies Pledging Local Manufacturing: Report

The Central government is reportedly considering import duty cut on fully built electric cars if a company commits to manufacturing in India under its new EV policy.

According to a CNBC-TV18 report, the government is considering investment threshold, duty reduction and time period as part of the overall EV policy.

The import duty concession for company's willing to manufacture in India will also benefit US EV maker Tesla.

At present, all car imports attract 70 per cent duty for vehicles up to $40,000.

Further, the government also expects cell manufacturing to begin in India by February to March next year.

Earlier in August, the Indian Express reported citing sources that the policy being considered could allow automakers to import fully-built EVs into India at a reduced tax as low as 15 per cent, compared to the current 100 per cent that applies to cars which cost above $40,000 and 70 per cent for the rest.

Earlier this Monday, the Prime Minister's Office (PMO) convened a meeting of senior officials to review the next phase of electric vehicle (EV) production in the country, which encompasses Tesla's proposed investment.

Tesla had previously sought a 40 per cent import tax on fully assembled electric vehicles, a reduction from the existing 60 per cent duty for cars valued under $40,000 and the 100 per cent on those priced higher.

The Indian customs duty regime currently does not distinguish between electric vehicles and conventional hydrocarbon-fuelled cars, imposing steep tariffs to promote domestic production.

"A new category may be introduced in the import policy to ensure that clean energy driven vehicles are taxed lower," said a government official cited in a report by The Economic Times.

The official added that this incentive will not be "just for Tesla but for anyone committing to set up electric vehicle manufacturing units."