New EV policy clears road for Tesla, other majors

Allows duty cut on imported cars if they invest 500 mn, set up plantin 3 yrs

- NITIN KUMAR

The Ministry of Heavy Industries (MHI) on Friday announced a new policy to boost electric vehicle (EV) manufacturing in the country by global players, such as Tesla, VinFast, BYD, Kia, Škoda, BMW, and Mercedes-Benz.

The new policy entails lower import taxes on certain electric vehicles for companies committing to at least $500 million (₹4,150 crore) in investment and a manufacturing plant within three years.

It proposes to reduce import duties for interested EV makers to 15 percent from the current 70 percent or 100 percent on vehicles having a CIF (cost, insurance, and freight) value of $35,000 and above for a period of five years from the date of issuance of the approval letter by the government.

This proposed duty structure aligns with the demands made by Elon Musk-promoted Tesla in its discussions with the Indian government.

According to officials, the policy allows all international players, including Chinese manufacturers, to qualify for a duty reduction, provided they establish manufacturing facilities within three years and achieve a localisation level of 50 percent by their fifth year of operations in the country.