Currently, 60 percent import duty is charged on cars priced below $40,000 in India. At the same time, 100 percent import duty is charged on cars costing more than 40 thousand dollars.
Tesla CEO Elon Musk recently talked about reducing the import duty on electric cars in India and now it is believed that the government is talking about bringing it down to 40 percent. Two senior government officials have given this information to the news agency Reuters.
According to these officials, import duty of 60 percent is currently charged in India on imported electric vehicles worth less than $ 40,000, including the cost of the car, insurance and cost of bringing, which the government is planning to reduce to 40 percent. At the same time, import duty of 100 percent is charged on electric vehicles costing more than 40 thousand dollars, which is being considered to be reduced to 60 percent. Regarding this, an official said that we do not confirm the reduction in import duty but it is being discussed.
If we talk about India, every year 3 million vehicles are sold here and with this India has become the fifth largest car market in the world, but most of the cars sold here cost less than 20 thousand dollars.
Tesla gave this argument for reducing import duty
Tesla appealed for reducing the import duty on electric vehicles, arguing that if the import duty is reduced to 40 percent, then it will become more economical and will boost sales. Tesla’s argument led to a public debate among automakers whether such a move would not contradict India’s move to increase domestic manufacturing.
An official said that at the same time it is believed that the government can cut import duty only if companies like Tesla benefit India’s economy. For example, they should manufacture vehicles in India or when they will be able to make such a setup. He further said that reducing the import duty is not a big problem as not many electric vehicles are imported. But we should get some economic benefit from it. Along with this, we have to maintain balance keeping in mind the domestic companies.
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