India to Slash EV Import Duties to 15% Under New Policy
The Indian government is poised to implement a new Electric Vehicle (EV) policy that will significantly reduce import duties from the current 110% to 15%. This strategic move aims to attract global EV manufacturers, including Tesla, to establish a presence in the Indian market.
Investment and Turnover Requirements
To qualify for the reduced import duty, manufacturers must meet specific investment and turnover criteria:
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Minimum Investment: Companies are required to invest ₹4,150 crore in new capital, excluding past investments and costs related to land or buildings.
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Turnover Milestones: Achieve a turnover of ₹2,500 crore by the second year, ₹5,000 crore by the fourth year, and ₹7,500 crore by the fifth year of operations.
Application Process and Import Allowances
Interested manufacturers will have a 120-day window to apply once the policy is officially notified. Approved applicants can import up to 8,000 premium EVs annually, each priced above $35,000, at the reduced 15% duty. These companies must establish local manufacturing facilities within three years and ensure 25% local value addition, increasing to 50% within five years.
Tesla’s Anticipated Entry into the Indian Market
Tesla is expected to be a significant beneficiary of this policy. Reports indicate that the company plans to enter the Indian market by April 2025, introducing an affordable EV priced between ₹21-22 lakh. Tesla has selected Mumbai and Delhi for its initial showrooms and intends to commence sales in these cities, along with Bangalore, by the third quarter of 2025.
Interest from Other Global Automakers
Other international automakers, such as Hyundai and Volkswagen, have also expressed interest in the new policy during discussions with the government. However, their specific investment plans have not yet been disclosed.
Implications for the Indian EV Landscape
This policy is poised to accelerate EV adoption in India by making premium electric vehicles more accessible to consumers. The emphasis on local manufacturing and value addition is expected to bolster the domestic EV industry, create employment opportunities, and contribute to sustainable economic growth.
As the government finalizes the policy framework, stakeholders anticipate a transformative impact on India’s automotive sector, positioning the country as a burgeoning hub for electric mobility.
