The government clarified that there are no ongoing considerations regarding granting duty concessions or exemption from local value addition for the import of electric vehicles (EVs) into India. Minister of State for Commerce and Industry, Som Parkash, responded to queries about potential exemptions for multinational car manufacturers, such as Tesla, from local value addition costs in components like heavy batteries, semiconductors, and magnetic parts, as well as subsidies on import duties for EVs.
Parkash highlighted that the government had introduced a production-linked incentive (PLI) scheme worth Rs 25,938 crore aimed at encouraging domestic manufacturing of advanced automotive technologies, including EVs and their components. He emphasized that, as of now, there are no proposals for exempting local value addition costs or providing subsidies on import duties for EVs in India.
The government has been proactive in enhancing both domestic and foreign investments in India as part of the Make in India initiative, the minister further stated in a written reply to the Lok Sabha. Additionally, he mentioned the approval of a PLI scheme worth Rs 18,100 crore specifically targeting advanced chemistry cells battery storage to incentivize the establishment of large-scale manufacturing facilities for these cells.
These statements gain significance given the recent demand by US-based electric vehicle manufacturer Tesla for a reduction in import duties on EVs in India. Currently, cars imported as Completely Built Units (CBUs) are subject to customs duty ranging from 60 per cent to 100 per cent based on engine size and the Cost, Insurance, and Freight (CIF) value being less than or above USD 40,000.
In November, Commerce and Industry Minister Piyush Goyal visited Tesla’s manufacturing facility in Fremont, California, announcing the company’s intention to double its imports of auto components from India.