NEW DELHI: Tesla’s plans to import cars in India at duty concessions have come to a halt. NS ministry of heavy industries, which sets policy for the country’s automobile sector, has told the US electric auto giant that the government is not in favor of a duty reduction based only on “intent to invest”.
The government has suggested that the unit set up by Elon Musk should start its India business by starting with local assembly operations, and then scale it up to full manufacturing. A government source told TOI, “When one considers investing after two-three years, giving duty concessions would be contrary to the policy that we have followed for many years, and would be unfair to the existing players.” Offered to one company only.
The government fears that industry-wide customs duty cuts will lead to companies instead importing electric vehicles, such as HailstoneEstablishment of manufacturing facilities.
Tesla executives have been told they should consider importing semi-knocked down (s kd) assembling them locally to attract lower duty, as opposed to importing kits and completely manufactured units into the country. Tesla has told the government that it is already sourcing components from India for its global supply chain and proposes to increase it.
Musk recently advocated a duty cut in India as the company prepares to start sales. “We expect at least one temporary tariff relief for electric vehicles. It will be greatly appreciated,” he had said during an interaction on Twitter. As part of a strategy to encourage companies to manufacture domestically, India imposes over 100% duty on imported vehicles, a strategy that has seen many carmakers set up shop in the country. It seeks to adopt a similar strategy for EVs, with some officials arguing that the government’s stand against giving similar concessions Apple A few years back the iPhone maker pushed its vendors to set up manufacturing facilities in the country.
many agencies like NITI Aayog, the Ministry of Transport and the Department for Promotion of Industry and Internal Trade are supporting the duty cut. But the move is unlikely to go ahead in the absence of the support of the Ministry of Heavy Industries.
The government has suggested that the unit set up by Elon Musk should start its India business by starting with local assembly operations, and then scale it up to full manufacturing. A government source told TOI, “When one considers investing after two-three years, giving duty concessions would be contrary to the policy that we have followed for many years, and would be unfair to the existing players.” Offered to one company only.
The government fears that industry-wide customs duty cuts will lead to companies instead importing electric vehicles, such as HailstoneEstablishment of manufacturing facilities.
Tesla executives have been told they should consider importing semi-knocked down (s kd) assembling them locally to attract lower duty, as opposed to importing kits and completely manufactured units into the country. Tesla has told the government that it is already sourcing components from India for its global supply chain and proposes to increase it.
Musk recently advocated a duty cut in India as the company prepares to start sales. “We expect at least one temporary tariff relief for electric vehicles. It will be greatly appreciated,” he had said during an interaction on Twitter. As part of a strategy to encourage companies to manufacture domestically, India imposes over 100% duty on imported vehicles, a strategy that has seen many carmakers set up shop in the country. It seeks to adopt a similar strategy for EVs, with some officials arguing that the government’s stand against giving similar concessions Apple A few years back the iPhone maker pushed its vendors to set up manufacturing facilities in the country.
many agencies like NITI Aayog, the Ministry of Transport and the Department for Promotion of Industry and Internal Trade are supporting the duty cut. But the move is unlikely to go ahead in the absence of the support of the Ministry of Heavy Industries.
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