US automaker Tesla awaits clarity from the government of India before making any move. Officials suggest that global EV makers could soon set up shop in India, with temporary reductions in import duties.
According to the Economic Times report, a senior industry executive, who preferred anonymity, stated that the government is close to finalizing a policy to extend concessional import duties on electric cars exceeding Rs 30 lakh (about $36,000) for two to three years. These reduced import duties are likely to be offered in lieu of bank guarantees by Tesla for a proposed investment to build an electric vehicle (EV) factory in India.
India currently imposes a 100% import duty on cars with a CIF value of over $40,000 and 60% for those below that threshold. Tata Motors, M&M, Maruti Suzuki, and Hyundai-Kia have already announced investments in the country. The government has emphasized that any incentive for local EV production will be the same for foreign and domestic companies. Additionally, Tesla may source up to $1.9 billion worth of auto parts from India this fiscal year.
This move aims to ensure timely investments towards local manufacturing, promoting the growth of the EV sector in India.