New Delhi, Nov 20 (KNN) G20 Sherpa Amitabh Kant said that India should scrap import duties on inputs used in the manufacture of products that are exported.

In an interview with Moneycontrol, Kant said, “India must be an integral part of global value chains; that's how business is done across the world. And that means you will have to import thousands of items for the end-product to be manufactured here.”

He added that these components should attract zero duty so that the end product remains cheap.

Kant, who was the secretary of the Department for Industrial Policy and Promotion (DIPP) from 2014 to 2016, said that while India can increase the duty on products meant for domestic consumption, such as furniture, food items, etc., exports should be competitively priced.

Even as Kant bats for zero import duties on raw materials used in products that are exported, he says that things are not quite as simple when it comes to providing tax incentives to lure the likes of Tesla to make in India.

“ The challenge with Tesla’s vehicles is that it is difficult to dismantle and reassemble them. For imports of fully-built EVs, India imposes duties in the region of about 135 percent to 40 140 percent, unless it is dismantled and assembled within the country,” he added.

Kant told Moneycontrol that the government’s aim should be that Tesla should manufacture in India, but Tesla says that it wants to test the market for three years, and it wants India to make the duty the same as for cars assembled here. “I think we should lay out a roadmap, that we are willing to do this for a particular period of time, subject to Tesla manufacturing in India, because the EV market is expanding here,” he added.

Eventually, Tesla should make EVs for the Indian market, which are then exported to the world, he added.

Media reports recently said that the Indian government is working on an EV policy that would allow international car manufacturers to import battery-powered vehicles at concessional rates, if they commit to eventually building them in India.

India’s electric car market is at a nascent stage, with EVs accounting for just 1.3 percent of the total passenger vehicles sold last year, according to BloombergNEF. The adoption of EVs in the country has been held back by the high cost, a dearth of options, and lack of charging stations.

(KNN Bureau)