The Ministry of Heavy Industries (MHI) unveiled a new strategy to increase the production of EV India opens up to International EV manufacturers and announces a plan to support USA’s TeslaIndia opens up to International EV manufacturers and announces a plan to support USA’s Tesla in the nation by international manufacturers, including Tesla, VinFast, BYD, Kia, Škoda, BMW, and Mercedes-Benz. Under the new policy, companies that invest at least $500 million (about Rs. 4,150 crore) and establish a manufacturing factory within three years will be eligible for lower import duties on select electric vehicles.
During five years beginning on the date the government issues the approval letter, it suggests lowering import levies for interested electric car manufacturers from the current 70% or 100% to 15% on vehicles with a CIF (cost, insurance and freight) value of $35,000 and above.
India’s New EV Policy
The requests made by Tesla, the company backed by Elon Musk, in their negotiations with the Indian government are in line with this planned duty structure.
Officials claim that the policy entitles all foreign companies including Chinese manufacturers to a duty reduction as long as they set up production facilities within three years and reach a 50% localization level by their fifth year of business in the nation. India’s ambitious objective of having 30 percent of new car sales be electric by 2030 is aligned with the Electric Vehicle Policy.
If the percentage of cars sold that are electric will only be 1.3% in 2022, the Indian government is eager to encourage the manufacturing of EVs. The new Electric Vehicle Policy aims to persuade international automakers who are hesitant or unsure about entering the Indian market. Due to its aging product selection and dearth of entry-level vehicles, Tesla is encountering difficulties that are causing demand to decline and competition from rivals like China’s BYD to surge. VinFast of Vietnam plans to invest US$2 billion and has started building a facility in Tamil Nadu, India, to reduce Electric Vehicle import duties.
