India considers sharp import tax cuts on Electric Vehicles after Tesla lobbied

| Updated: August 9, 2021 6:17 pm

Elon Musk, the chief executive of Tesla tweeted last month that Tesla would set up a factory in India if it is successful with imported vehicles. The company wrote to the Indian Ministries seeking a big reduction in import duties on electric vehicles however it was likely to face resistance from the Government.

Also Read: https://www.vibesofindia.com/billionaire-musk-wants-tesla-on-indian-road-high-taxes-major-hurdle/

The government is considering slashing the tax rate to 40 percent from 60 percent for imported electric vehicles (EVs) with a value of less than Rs. 29,69,222 including the car’s cost, and insurance. This comes after Tesla Inc’s appealed for a cut polarised the country’s auto industry.

India is the world’s fifth-largest car market with annual sales of around 3 million vehicles however the majority of the cars sold are priced below Rs 14,84,611. As per the industry estimates, EVs make up only a fraction of the total and luxury EV sales are negligible.

The proposal is still under discussion in India’s Finance and commerce ministries, as well as its federal think tank Niti Aayog, chaired by Prime Minister Modi.

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