The heavy industries ministry has asked US-based electric car major Tesla to first start manufacturing its iconic electric vehicles in India before any tax concessions can be considered, government sources said.
They said that the government is not giving such concessions to any auto firm and giving duty benefits to Tesla will not send a good signal to other companies that have invested billions of dollars in India.
Tesla has demanded reduction in import duties on electric vehicles (EVs) in India.
At present, cars imported as completely built units (CBUs) attract customs duty ranging from 60 per cent to 100 per cent, depending on engine size and cost, insurance and freight (CIF) value less or above USD 40,000.
In a letter to the road ministry, the US firm had stated that the effective import tariff of 110 per cent on vehicles with customs value above USD 40,000 is "prohibitive" to zero-emission vehicles.
It has requested the government to standardize the tariff on electric cars to 40 per cent irrespective of the customs value, and withdraw the social welfare surcharge of 10 per cent on electric cars.
It has stated that these changes would boost the development of the Indian EV ecosystem and the company will make significant direct investments in sales, service, and charging infrastructure; and significantly increase procurement from India for its global operations.
The company has argued that these proposals would not have any negative impact on the Indian automotive market as no Indian OEM currently produces a car (EV or ICE) with ex-factory price above USD 40,000 and only 1-2 per cent of cars sold in India (EV or ICE) have ex-factory/customs value above USD 40,000.
Union Minister Nitin Gadkari had said Tesla has a golden opportunity to set up its manufacturing facility in India given the country's thrust on e-vehicles.
Tesla is already sourcing various auto components from Indian automakers and setting up base here would be economically viable for it, the road transport and highways minister had said.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.