India on Friday lowered import taxes on certain electric vehicles produced by carmakers that commit to invest at least $500 million and start domestic manufacturing within three years, bolstering Tesla's plans for the market.
The policy is a big win for Tesla as it's in line with what the company had been lobbying for in New Delhi, despite pushback from domestic carmakers.has been trying to enter the Indian market for years, but New Delhi wanted a commitment to local manufacturing. Tesla officials visited India several times over the last year, with Musk meeting Prime Minister Narendra Modi in June.
Under the new policy, effective immediately, companies that meet the requirements will be allowed to import up to 8,000 EVs costing $35,000 or more a year at a lower tax rate of 15%. India currently levies a tax of 70% or 100% on imported EVs depending on their value., starts at $38,990 in New York, according to the company's website. Tesla did not respond to an email seeking comment.
EV imports at the lower tax rate will be allowed for a maximum of five years. The duty foregone would be limited to the investment made by the company or around $800 million, whichever is lower.This will open up the world's third-largest auto market to new carmakers, suppliers, technologies and the overall EV ecosystem, said Gaurav Vangaal, associate director at S&P Global Mobility.
India has been working on the EV policy for several months despite lobbying from Tata Motors and rival Mahindra & Mahindra .
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