New Delhi : The Modi government at the Center can cut the import duty to facilitate the entry of Elon Musk’s Tesla in the Indian electric vehicles market. Along with this, the government is also considering making a new electric vehicle policy. According to a report in the English newspaper The Times of India, in the new electric vehicle policy, the government is considering reducing the tax on import of electric vehicles by 15 percent after the consent of Indian vehicle manufacturers. However, at present the government collects 100 percent tax on the import of electric vehicles. It is a matter of fact that in recent months the government had bluntly told Tesla representatives not to give tax exemption, but after the visit of Prime Minister Narendra Modi to America, the government has changed its mind.
Tax exemption will be given after the consent of Indian manufacturers
At present, American industrialist Elon Musk’s Tesla Inc. is trying hard to enter the Indian car market. It has been said in the report that if the government gives tax exemption on the import of electric vehicles, then Tesla will get convenience in entering the Indian car market. However, the government is also saying that tax on import of electric vehicles can be reduced only when local vehicle manufacturers agree to it. Along with this, they should also promise to start sourcing components locally in India and provide bank guarantee against any default in their commitments.
Tesla is already ready
Quoting sources in the report, it is being told that the government will also take a guarantee from the companies that they will buy about 20 percent of the parts locally in the first two years, which will increase to 40 percent by the fourth year. It is also being told that Elon Musk’s company is already making preparations to take advantage of the new policy of the government. It aims to buy spare parts worth more than Rs 15,000 crore from India this year. Even before this, the company has purchased parts worth 1 billion dollars (about Rs 8,300 crore). With this new policy of the government, the electric car plans of BMW and Audi including Tesla can get the green signal.
Shock to Indian companies
The government’s tax exemption on import of electric vehicles to car companies like Tesla can prove to be a big blow to Indian car manufacturing companies. Indian electric vehicle manufacturing companies have already invested heavily in manufacturing electric vehicles and their components in the country. Tesla had earlier indicated that the price of its portfolio in India could start from Rs 20 lakh. At this price buyers may be attracted towards it.