India has asked Elon Musk-led Tesla to ramp up local procurement and to share the detailed manufacturing plans before considering the US-based electric carmaker’s demand for lower import takes on Ev’s ( electric vehicles).
As per reports, the ministries of both Finance and Heavy Industries sought the details from the company during a meeting earlier this month. This major development comes in the backdrop of Tesla in July writing to the government asking for a reduction in import duty on electric vehicles to 40 per cent from the current 60-100 per cent.
The government reportedly also asked Tesla to consider importing fully built vehicles compared to so-called crashed or under partially built vehicles, which attracts lower import taxes.
To date, Tesla claims to have procured $ 100 Mn from India and suggested that the figure be increased according to any tax concessions. In addition to that, the company also asked the government to scrap the 10 per cent social welfare surcharge which is imposed on all imported cars and helps fund health and education programs.
India currently imposes a 100% import duty tax on fully imported vehicles with expenses, insurance and freight (CIF) value of more than $40,000 and 60% on cars where CIF value is lower than $40K. The discussion on heavy import taxes that the Indian government imposed on EV imports started when Musk was questioned about India’s launch of Tesla.
“We want to do so, but import duties are the highest in the world by far of any large country! Moreover, clean energy vehicles are treated the same as diesel or petrol, which does not seem entirely consistent with the climate goals of India,” Elon Musk said.