After a protracted process, India has finally announced a new electric vehicle (EV) policy that will support the entry of international EV makers including Tesla, as well as other interested companies.
Related: Tesla Proposal Prompts India to Consider Import Tax Cut
Import taxes would be reduced on some EVs made by carmakers who pledge to invest at least $500 million. Furthermore, companies will be given a period of three years to set up local manufacturing facilities for electric vehicles and must ensure that at least 25% of the components are sourced from India by the third year, increasing to 50% by the fifth year.
Companies that meet these requirements will be able to import up to 8,000 EVs with a cost, insurance, and freight (CIF) value of $35,000 or higher per year at a 15% tax rate. This is a significant advantage because taxes on imported cars in India run between 70% and 100%, depending on their value.
Related: Prices of EVs in India to be Equal of Petrol Cars in 2 Years
EV imports at the reduced tax rate will be permitted for a maximum of 5 years. According to Reuters, the duty foregone would be restricted to the company’s investment or approximately $800 million, whichever is lower.
A computer animation professional with over 23 years of industry experience having served in leading organizations, TV channels & production facilities in Pakistan. An avid car enthusiast and petrolhead with an affection to deliver quality content to help shape opinions. Formerly written for PakWheels as well as major publications including Dawn. Founder of CarSpiritPK.com
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