Following a suggestion from Tesla Inc., the Narendra Modi-led Indian government is reportedly working on a new electric vehicle policy that would reduce import taxes for automakers that commit to some local manufacturing.
Tesla -one of the top EV producers in the world. According to a report by Reuters, the policy under consideration could allow automakers to import fully-built (CBU) electric vehicles into India at a reduced tax as low as 15%, down from the current 100% that is applied to cars that cost more than $40,000 (roughly INR 33 lakh).
Tesla is now preparing to enter the Indian market, and the tax break would make it easier for the American business to sell a variety of its products there.
According to a representative with knowledge of the matter, “there is an understanding with Tesla’s proposal and the government is showing interest.”
If the proposal is implemented, it might lead to a sharp drop in the cost of fully imported EVs, aiding not only Tesla but also other regional companies like luxury automobile makers. Additionally, the legislation can persuade other major global automakers to think about establishing a factory in India and breaking into the rich Indian auto market in the future.