In a major jolt to Tesla’s plans to enter India's market, the federal government has denied lowering the import tax on electric vehicles(EV).
According to media reports published on Thursday, Minister of State for Commerce and Industry Som Parkash in response to a question in the parliament on late Wednesday said that the government is currently not considering reducing taxes on imported electric vehicles.
“Presently, there is no proposal either to provide an exemption from local value addition cost or to provide a subsidy on the import duty on electric vehicles in India", Parkash said.
He further stated that the existing policies under the “Make in India” program aim to encourage domestic and foreign investment in the EV industry and further highlighted some of the existing policy initiatives and measures taken by the government to develop a strong ecosystem to promote industrialisation, domestic value addition, and make the country globally competitive.
Notably, the government launched a $3.1 billion incentive programme in 2021 to boost local EV production and additional incentives are being offered to companies that want to build batteries in India under a $2 billion programme.
The policies highlighted by the minister included the introduction of a goods and services tax (GST), reduction in corporate tax, improving ease of doing business, FDI policy reforms, measures for reduction in compliance burden, measures to boost domestic manufacturing through public procurement orders, a phased manufacturing programme (PMP) and quality control orders (QCOs), etc.
The minister's statement is seen as a huge blow to Tesla, which is looking to make inroads in the Indian market, and which has long been demanding a reduction in import duty.