Tesla’s Proposal For Lower Import Duty Finds Traction
- ByAyushi Ray | August 30, 2021
Tesla’s proposal for lower import duty finds traction, it has been backed by several government agencies, including the road transport ministry, department for promotion of industry and internal trade and NITI Aayog. The final decision will now be taken by the Finance Ministry. The heavy industries ministry is the sole dissenter amid strong opposition from some of the largest auto industry. Officials indicated that there is discussion around the tariff cuts coming with certain conditions, which may include a mandated level of infrastructure creation in the form of charging stations or similar requirements. Alternatively, a domestic sourcing clause could be added, which will require the Elon Musk-founded entity to buy some components from India, a model that was tried with single-brand retailing in the initial years.
Musk has been discussing an entry into India for the last few years. Sources have said that Tesla has brought a lower import duty of 40% from current 60 % on fully assembled electric cars priced below $40,000 and 60% from current 100% on vehicles above $40,000. Over the next few years, the government is hoping that Tesla could begin manufacturing in the country. The Palo Alto headquartered company has registered an entity in India as part of its plans to foray here and start with its plans of having dealers here. Union road transport minister Nitin Gadkari had urged the company executives that Tesla should have their own manufacturing unit in India. Then there would be no need of imposing such huge amount of import duty.
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