Tesla has repeatedly asked the Indian government to lower the import taxes on electric cars, but the government has refused. The federal government has refused to cut the import duty on electric vehicles, which is a serious setback to Tesla‘s intentions to enter the Indian EV market.
What is the government’s view on Tesla’s tax request?
In response to a question in the parliament late on Wednesday, Som Parkash, the minister of state for commerce and industry, reportedly stated that the government is not currently considering lowering tariffs on imported electric vehicles, according to media reports released on Thursday.
Parkash stated, “At this time, there is no proposal to provide a subsidy on the import duty on electric vehicles in India, nor to provide an exemption from local value addition costs.” He went on to say that the “Make in India” program‘s current policies are meant to attract both foreign and domestic investment in the electric vehicle (EV) sector. He also listed some of the government’s current policy initiatives and actions that are meant to create a robust ecosystem that will support industrialization, domestic value addition, and the nation’s rise to global competitiveness.
Notably, the government started a $3.1 billion incentive scheme in 2021 to increase domestic EV production, while a $2 billion programme offers further benefits to businesses who wish to assemble batteries in India.
The minister outlined several policy initiatives, such as the implementation of a goods and services tax (GST), a decrease in corporate tax, enhanced business-friendly policies, FDI policy reforms, steps to lighten the regulatory burden, public procurement orders, quality control orders (QCOs), and a phased manufacturing programme (PMP).
The minister’s remarks are viewed as a severe setback for Tesla, which has long called for a decrease in import taxes and is trying to gain traction in the Indian market.
