News Brief

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

Swarajya StaffNov 08, 2023, 03:41 PM | Updated 03:41 PM IST
Tesla's manufacturing plant (Representative Image)

Tesla's manufacturing plant (Representative Image)


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 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."

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