New Delhi, Feb 15 (KNN) The Centre is on the verge of approving a policy to extend concessions on import duty for electric cars priced above Rs 30 lakh for a duration of 2-3 years.

This move potentially opens the door for Tesla's entry into the Indian market, according to a report by ET released on Thursday.

As per the report, this extension is expected to be contingent upon bank guarantees provided by the US-based car manufacturer, aimed at securing investments for the establishment of an electric vehicle (EV) factory in India.

Currently, India imposes a 100 per cent import duty on cars priced above Rs 33 lakh, inclusive of freight and insurance charges. Below this threshold, a duty of 60 percent is enforced.

Tesla had previously requested the Centre to reduce import duties to 15 percent for its cars during the initial two years, in exchange for an investment of up to USD 2 billion in India.

A source mentioned in the report stated that the precise amount of bank guarantees is yet to be finalised. It's noteworthy that these bank guarantees can be encashed by the government if the company fails to fulfil its commitments.

However, concerns have been raised by Indian automakers regarding the reduction in import duty for Tesla, fearing it would provide an unfair advantage to the American automaker.

In January, Anish Shah, the Managing Director at Mahindra & Mahindra, expressed his views at the World Economic Forum, emphasizing the importance of maintaining a level playing field.

He stressed the significance of investing in India to strengthen the domestic industry, rather than becoming reliant on imported products.

(KNN Bureau)