To accelerate the adoption of electric vehicles in the Indian market, the Government of India has approved a new policy to attract investments in the electric vehicle sector. The Government is now allowing a minimum investment of INR 4,150 Crores without any upper limit.
New Investment Approvals for EV Import
However, investing companies must open up manufacturing facilities in India within three years and begin commercial production of electric vehicles. In addition to this, investing companies will also get the benefits of importing cars with reduced duty rate.
The import at reduced custom duty will be limited and implies to cars with CIF (Cost + Insurance + Freight) of USD 35,000. With CIF of USD 35,000 i.e ~ INR 29,000 the government will apply 15% customs duty for 5 years. This is similar to the duty applied on CKD vehicles. Also, if the manufacturer sets up a facility to produce the hey are required to achieve 25% localisation by the third year and 50% localisation by the fifth year.
Also, the total number of EVs allowed for import will be limited to an investment of INR 6484 Crore. The government will also allow import of a maximum of 40,000 units or 8,000 units per year, with an investment of USD 800 Million. Furthermore, the investment commitment will have to be backed up by a bank guarantee for the slashed custom duty.
Tesla Could Bring EVs to India Under New EV Import Policy
Thanks to the new policy American EV manufacturer Tesla will now be able to bring its cars to the Indian market at an affordable price point. The brand has been trying to enter the Indian EV segment for quite sometime, however, the brand has been facing resistance from Indian EV manufacturers which have invested heavily to localise their products. However, Tesla is yet to reveal when the company plans to bring their products to India.