Domestic automakers, including Tata Motors and Mahindra & Mahindra, have reportedly opposed lower import taxes, emphasising the need for a level playing field to promote local manufacturing
Global electric vehicle (EV) manufacturing giant Tesla faces uncertainty in entering the Indian market as the government is yet to decide on reducing import taxes for EVs, according to a top government official.
A top government source stated that Tesla aims to bring cars to India in the $24,000 to $36,000 range, targeting a volume market. However, the resistance of domestic car makers, which also target the same bracket, has hindered a final decision on import tax reductions.
In previous meetings, Tesla committed to significant local manufacturing investment in exchange for initial import tax benefits. The demand for lower taxes, attributed to India's high import duty, faces opposition from domestic automakers concerned about increased competition.
The government is considering a policy to reduce the 100 percent EV import tax to as low as 15 percent for automakers committing to local investment and manufacturing over time. Domestic automakers, including Tata Motors and Mahindra & Mahindra, have reportedly opposed lower import taxes, emphasising the need for a level playing field to promote local manufacturing.