The Indian government may soon cut taxes on the import of electronic vehicles. An EV policy is reportedly in the works and the country is also contemplating an import tax cut for some vehicles from the UK as part of a free-trade deal. The updates came even as Union Minister Piyush Goyal visited a Tesla plant on Monday and noted that the US car maker was on its way to double its components imports from India.
People familiar with the matter told Bloomberg on Tuesday that the Narendra Modi-led government was considering tax cuts on the import of completely built units of electric vehicles for up to five years. The policy would also allow international car manufacturers – such as Tesla – to import battery-powered vehicles on concessional duty rates if they commit to eventually building them in India.
The report however indicated that a final decision was yet to be taken on the contours of the policy. Vehicles imported to India as fully completed units currently face tariffs ranging from 70% to 100%.
Meanwhile India is also considering duty concessions on electric vehicles as part of its free trade agreement with the UK. Both countries are looking to finalise a deal by the end of 2023 and are expected to hold a fresh round of in-person talks soon.
Another Bloomberg report quoting sources said recently that New Delhi was thinking of imposing a 30% concessional tariff on 2500 EVs imported from the UK each year with a cost of more than $80,000.
India has seen a growing demand for electric cars from the middle-class and rich consumers. However high prices and a dearth of options, combined with a shortage of charging stations have hindered adoption. The government launched a $3.1 billion incentive program in 2021 to boost local EV production.
(With inputs from agencies)
