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The Union government is considering slashing the import duties on Tesla electric cars in India

We earlier told you that Tesla, the US-based electric carmaker, has officially entered the Indian market by registering its subsidiary in Bengaluru under the name Tesla India Motors and Energy Private Limited. Furthermore, the company had also made some key appointments for India such as Policy and Business Head, Charging Manager, and Country HR leader. Now, a Reuters report claims that the Indian government is contemplating a certain amount of rebate in import duties on Tesla electric cars in the domestic market.


The Union government is considering slashing the import duties to 40 percent on Tesla electric cars in the country, revealed two senior government functionaries. For those asking, the present import duty on electric vehicles whose value is below $40,000 (inclusive of cost, insurance and freight) stands at 60 percent and the government is planning to bring it down to 40 percent. Moreover, for electric cars valued over $40,000, it is thinking to slash the import duty from 100 percent to 60 percent. "We haven't firmed up the reduction in duties yet, but there are discussions that are ongoing," one of the officials said. Tesla had been constantly appealing to the Indian government for a cut in the import duty till the time it started local manufacturing in the country.

It was in July earlier this year when Tesla first requested the Government to lower down the import duty to 40 percent in order to make its electric cars affordable for buyers in India. After rounds of intense lobbying, the Government is of the view that it can grant relaxations in the import duty if Tesla returns some benefit to the domestic economy in the form of local manufacturing or at least can provide a definite timeline over the commencement of local production in India. "Reducing import duties is not a problem as not many EVs are imported in the country. But we need some economic gain out of that. We also have to balance the concerns of the domestic players," the official said.

The senior official in the government further revealed that the Ministry of Finance, Ministry of Commerce and Niti Aayog - chaired by PM Narendra Modi - are still discussing Tesla's proposal and all stakeholders will be taken in confidence before announcing a final decision. The official also made it clear that the proposed cut in import duty is strictly for EVs and not for any other category of imported cars. Elon Musk, CEO, Tesla took to Twitter micro-blogging site last month to share his views and tweeted that a production facility in India was "quite likely" if the brand is successful with the initial vehicle imports with the government lowering down the high taxes on them.


Source - Reuters

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