In a strategic move to entice Tesla into the Indian market, the Indian government is actively considering a substantial reduction in import tariffs and duties on Completely Built-Up (CBU) electric vehicles (EVs). Negotiations indicate that this initiative aims to facilitate the establishment of a manufacturing unit within India by a prominent U.S. EV manufacturer, potentially Elon Musk’s Tesla.
Presently, CBUs with a price below $40,000 incur a hefty 70% import duty, while those exceeding $40,000 face an even steeper 100% import duty. The proposed reduction could potentially bring the import duty down to 15% for electric vehicles across all price ranges. However, it’s crucial to note that no official agreement on this policy change has been finalized.
According to sources, the Indian government emphasizes creating a comprehensive package that benefits the entire country rather than catering exclusively to one company. There is a consideration for a sunset clause in any tariff concessions offered.
Recent reports suggest that Tesla CEO Elon Musk is scheduled to meet with India’s Minister of Commerce and Industry, Piyush Goyal. Discussions are expected to cover India’s evolving policy, allowing automakers to import fully built EVs into the country at a reduced tax rate of 15%, a significant drop from the existing 100%. It’s important to underscore that this policy is still in the developmental stage.
This move comes after Tesla’s decision to halt its plans to enter the Indian market in 2021, citing inconclusive talks on import duties and the government’s push for local manufacturing. Now, with the potential tariff reduction, there’s renewed optimism for Tesla’s entry into India. Stay tuned for further developments on this significant development in the EV landscape.