India is trying to close a free-trade agreement (FTA) with the UK by the end of the year, according to two people engaged in the negotiations, and it has proposed reducing import levies on a limited number of UK-made electric vehicles, according to a Bloomberg story.
New Delhi is considering applying a 30 percent concessional tariff, according to sources who spoke with Bloomberg, on the 2,500 electric vehicles that are imported from the UK each year and cost more than $80,000. Cars that are imported into India as completely assembled units are currently liable to tariffs that range from 70 percent to 100 percent, depending on their value.
The UK’s demand for import reductions on electric vehicles is one of the remaining outstanding issues in the free trade discussions. It is therefore improbable that a settlement will be made public before December 2023, despite the fact that Indian Prime Minister Narendra Modi and UK Prime Minister Rishi Sunak had intended to finalize the agreement by the end of October 2023.
India’s Ministry of Commerce did not promptly respond to a request for information from Bloomberg.
Demand for EVs in India
The demand for electric automobiles is rising among wealthy and middle-class consumers in India, the country with the largest population on the planet. The nation’s adoption of EVs has been hampered by the high cost of EVs, a lack of options, and a dearth of charging points. Allowing more EVs to enter the market might speed up the switch to greener forms of mobility in a nation whose capital city has some of the worst air pollution in the world.
The best-selling electric car in the country, the Nexon.ev from Tata Motors Ltd., is priced under Rs 15 lakh ($18,000) in the budget-conscious Indian market. Exotic German automakers Mercedes-Benz Group AG, BMW AG, and Volkswagen AG’s Audi sell electrified cars for above $80,000 in India.
The Modi administration is importing electric vehicles (EVs) cautiously as it seeks to create an indigenous industry for the manufacturing of EVs and their parts. In 2021, the government launched an output-linked incentive package worth $3.1 billion to encourage the development of electric vehicles in the country.
According to those with knowledge of the procedures, India has not yet made up its mind about how much to charge for imported electric cars.
