Indian Govt Weighs Import Tax Cut On EVs For Automakers Partnering With Local Manufacturers

New Delhi, Aug 26 (KNN) Indian Government contemplates Reducing Import Tax on Electric Vehicles for Automakers Collaborating with Local Manufacturers, according to an exclusive report by Reuters.

The move comes after Elon Musk's Tesla made an investment proposal to set up a car factory in India, a way to enter the domestic market.

As per the report, the import tax could be reduced to as low as 15 per cent as opposed to the current 100 per cent for cars that cost above Rs 33 Lakhs and 70 per cent for the rest.

The Reuters report citing people familiar with the development noted that the move if implemented could allow electric vehicle makers to import fully-built EVs into India with just 15 per cent import tax to be paid to the Indian Government.

If India Government implements the reduction in import tax this would inevitably also bring down the cost of imported electric vehicles in the domestic market.

Notably, local carmakers have been avoiding delving much into the EV variant manufacturing. However, with more and more companies entering the Indian market with their EVs, it would force a drastic change in the Indian automobile sector.

The reduction in import tax would also encourage global automakers, beyond Tesla, to tap the world's third-largest car market where sales of EVs are less than 2 per cent of total car sales, but growing rapidly.  (KNN Bureau)