Under India’s new EV policy, imports of electric vehicles from any nation, including China, face no restrictions, a senior government official disclosed in an interview with a TV channel on Tuesday.
Last month, the Indian government endorsed the new EV policy, offering import duty concessions to firms investing a minimum of USD 500 million in local manufacturing facilities.
Companies establishing EV passenger car manufacturing plants are entitled to import a limited number of vehicles at a reduced customs/import duty of 15% for vehicles priced at USD 35,000 and above, for a five-year period from the government’s approval date.
Presently, fully assembled unit imports are subject to customs duty ranging from 70-100%, depending on engine size and cost, with a threshold of USD 40,000 for insurance and freight value.
The government has clarified that the policy won’t negatively impact local players, but rather aims to grow the Indian EV market.
Rajesh Kumar Singh, Secretary of the Department for Promotion of Industry and Internal Trade (DPIIT), stated, “We’re not tailoring a package for anybody. This is open to everybody. The aim is to kickstart four-wheeler e-car manufacturing in India with stringent value-addition norms, while allowing limited imports. We’ll permit only 8,000 vehicles per company annually, with a maximum cap of 40,000. It’s not zero duty.”
However, a report from the Global Trade Research Initiative (GTRI) cautioned that the new EV policy might lead to a significant influx of Chinese auto firms in the Indian market. The report suggested that in the coming years, every third electric vehicle and many passenger and commercial vehicles on Indian roads could be from Chinese firms, either manufactured in India or through joint ventures with Indian companies.