Prime Minister Narendra Modi with Elon Musk during the former's US visit.
Credit: Twitter/@narendramodi
In response to Tesla's request that India reduce import tariffs on electric vehicles (EVs) as a prerequisite for setting up a manufacturing plant in the country, the Centre is considering a 15 per cent reduction in customs duties for EVs across all price ranges, Financial Times reported on Monday.
India currently imposes high customs duties, with a 70 per cent tariff for cars valued under Rs 33.31 lakh ($40,000) and 100 per cent for cars priced that much or higher. The tariff concession under consideration would apply to all international EV manufacturers and not just Elon Musk's company, the publication reported.
If such a policy is adopted, it could amount to a drastic reduction in the cost of imported EVs that Indian carmakers have been keen to avoid. It would open the door for global automakers to tap India's car market, the world's third-largest.
And while EV sales currently make up less than 2 per cent of the overall car sales, they are growing rapidly.
In June, Elon Musk met Prime Minister Narendra Modi in New York. Musk, urged by the Prime Minister to consider India as a manufacturing base, said he plans to visit the country in 2024.
Then in August, Commerce Minister Piyush Goyal met senior Tesla executives in a closed-door meeting to discuss plans to establish the said plant. Tesla's senior public policy and business development executive Rohan Patel, and a vice president for supply chain, Roshan Thomas, also met officials from the Invest India agency that month. Goyal is set to travel to San Francisco this week, where a meeting with Musk is likely.
(With agency inputs from Reuters and PTI)