The government fears that an industry-wide cut in customs duties will result in the importation of electric vehicles instead of companies, such as Ola, setting up manufacturing facilities.
Tesla executives have been told they should consider importing semi-knocked down kits (SKDs) into the country and assembling them locally to attract lower tariffs, instead of importing fully built units. Tesla told the government that it is already purchasing components from India for its global supply chain and proposes to increase it. Musk recently proposed reducing tariffs in India as the company prepares to start sales. “Hopefully there will be at least a temporary tariff relief for electric vehicles. It would be greatly appreciated, “he said in a Twitter conversation. India maintains tariffs above 100% on imported vehicles as part of a strategy to encourage companies to produce domestically, a strategy that has seen several automakers open a store in the country. He wants to adopt a similar strategy for electric vehicles, with some officials arguing that the government’s stance against offering Apple-like concessions a few years ago led the iPhone maker to persuade its suppliers to set up plants. of production in the country.
Several agencies such as NITI Aayog, the Ministry of Transport and the Department for the Promotion of Industry and Internal Trade are advocating a tariff cut. But in the absence of support from the heavy industries ministry, the move is unlikely to go through.
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