Government Not Considerate On Slashing Duties On Importing Electric Vehicles

No duty cuts expected for importing electric vehicles; government focuses on production-linked incentives for auto industry with Rs 25,938 crore budget.

Government states that no cut on duties should be expected on importing electric vehicles, when asked if there is any proposal to offer expedition to Tesla or other electric carmakers from local value addition of cost in heavy batteries, magnetic parts, and semiconductors; and subsidy on the import duty on the import of Electric Vehicles (EVs) in India, Minister of State for Commerce and Industry Som Parkash said a production-linked incentive scheme for automobile and auto component industry with a budgetary outlay of Rs 25,938 crore was announced by the government.

The move was aimed at providing financial incentives to boost domestic manufacturing of advanced automotive technologies products including EVs and their components, he said.

"Presently, there is no proposal either to provide exemption from local value addition cost or to provide subsidy on import duty on import of EVs in India," Parkash said.

The government has also taken various steps to boost domestic and foreign investments in India to enhance local value addition under Make in India initiative, the minister said in a written reply to the Lok Sabha.

The government, he said, has approved PLI scheme for advanced chemistry cells battery storage with a budgetary outlay of Rs 18,100 crore.

The scheme incentivises the establishment of Giga scale ACC manufacturing facilities in the country for 50 giga watt hour.

These remarks assume significance as the US-based electric car maker Tesla has demanded a reduction in import duties on EVs in India.

At present, cars imported as Completely Built Units (CBUs) attract customs duty ranging from 60 per cent to 100 per cent, depending on engine size and Cost, Insurance and Freight (CIF) value less or above USD 40,000.

In November, Commerce and Industry Minister Piyush Goyal visited the manufacturing facility of US-based electric vehicle major Tesla in Fremont, California, and said the company would be doubling its auto components imports from India.

The world's largest electric car producer Tesla Inc's chief Elon Musk met Prime Minister Narendra Modi in June in New York and after the meeting Musk had said that he planned to visit India in 2024.