Indian Government Not Considering Duty Concessions For Import Of EVs

The Indian government has stated that it is not considering any proposals to provide any special concessions or exemptions for imports of electric vehicles into the country. This was clarified via a written reply by Minister of State for Commerce and Industry, Som Parkash, to a question raised in the Lok Sabha.

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The minister said there is presently no plan to either subsidise import duties or waive domestic manufacturing requirements that specify levels of local value addition for imported electric vehicles. This indicates global automakers who have shown interest in entering India, such as US electric vehicle manufacturing giant Tesla, would receive no special policy relief or incentives as per the existing stance.

Electric cars imported as fully built units (CBUs) attract high customs duties ranging from 60% to 100%, depending on their invoice value and engine specifications. The minister’s statement suggests that the government intends to continue imposing these rates in line with India’s overall policy of promoting local manufacturing under the Make In India initiative rather than imports.

In November, Commerce and Industry Minister Piyush Goyal visited the manufacturing facility of Tesla in Fremont, California

The statement added that India has recently introduced a production-linked incentive (PLI) scheme for the automobile sector, including electric vehicles, with an outlay of Rs 25,938 crore. It offers financial incentives to manufacturers to boost domestic production capacities for EVs and related components. A separate PLI for advanced chemistry cell battery storage manufacturing amounting to Rs 18,100 crore has also been approved to facilitate large-scale domestic battery factories to power the EV growth story.

The government views these schemes as the primary tools for catalysing India’s transition rather than tax cuts on imports. However, the remarks did not completely rule out a change in the duty structure for imported EVs in the future.

Also Read: Commerce Minister Piyush Goyal Visits Tesla’s California Manufacturing Facility

The comments hold significance considering electric automaker Tesla and its high-profile CEO Elon Musk have publicly advocated for lower import duties. Tesla has indicated it is keen to enter the high-potential Indian car market but wants duties reduced first for its models to become more affordable. However, aligning with Make in India directives, the government for now appears unwilling to create exceptions for fully built imported units like Tesla cars.