The Indian government said on Saturday that it expects a favorable response to its electric-vehicle (EV) policy from a number of automakers. The policy was launched in March with the goal of luring in significant foreign players such as Tesla.
The Department for Promotion of Industry and Internal Trade’s (DPIIT) secretary, Rajesh Kumar Singh, said that the government has used tariff modifications in its strategy—without really spending any money—to entice businesses to commit to setting up shop in India.
Without specifically mentioning Tesla, Singh stated at the CII’s annual business summit that they anticipate feedback on their new policy from a wide range of businesses, not just one.
The government’s March 15 electric vehicle policy lowers tariffs for businesses that establish production facilities in the nation with a $5,000,000.0 minimum investment, with the goal of luring big overseas firms like Tesla.
According to the policy, a company can start producing e-vehicles for sale within three years of establishing production plants in India, and it can take up to five years to reach 50% domestic value addition (DVA).
A limited number of vehicles with a 15% customs/import duty on cars priced USD 35,000 and above will be imported by the companies that set up production plants for electric passenger cars. After the government issues the letter of permission, this approval will remain in effect for five years.
Currently, depending on the engine size and a cost, insurance, and freight (CIF) value of USD 40,000 or more, the customs duty on cars imported as completely built units (CBUs) varies from 70 to 100%.
The initiative aims to promote India as a hub for EV manufacturing and attract investment from respectable foreign EV manufacturers. The company will be permitted to import CBUs of e-4W that they manufacture at a 15% customs charge reduction under the scheme, subject to specific restrictions.
According to Singh, two major multinational businesses have pledged to invest in the Indian tyre industry.
“Two significant multinational corporations approached us to request imports of specific commodities that were placed on a limited import list. We informed them that while imports are welcome, we prefer that certain product lines be manufactured in India. We permitted such allowances once they provided us with those assurances.” stated Singh.
India has put specific tire types on the licencing list and imposed strict quality control rules on them in an effort to encourage domestic production.
In addition, Singh Zee News noted, “There are other ways to ensure that the kind of goals that we have under the PLI (production linked incentive) scheme for investments can be met even by prudent use of tariff-and non-tariff policies” .
The secretary talked about India’s participation in the free trade agreement that the four European bloc members signed in March, calling it the first of its kind to incorporate investment guarantees. The agreement is known as the European Free Trade Association (EFTA).
He told the audience that there are measures in place to recover market access in the event that an obligation is not fulfilled and mentioned that the authorities are keeping an eye on those plans.
