Centre Asks Tesla To Manufacture Cars In India Before Getting Any Tax Relief: Report – EQ Mag Pro
In a ‘Make in India’ push, the Centre has asked Tesla to initiate production in India first in order to be considered for import duty relief.
The Union Government has asked Elon Musk-owned Tesla to manufacture its green vehicles in India in order to be considered for tax concessions, sources have revealed. The company which wants to launch cars in India, has expressed concerns over the high import duties on electric vehicles (EVs), which would raise the cost of its cars to unimaginable rates.
According to PTI sources, the Centre has made it clear that the government is not giving such concessions to any auto firm. The heavy industries ministry has stated that giving duty benefits to the Elon Musk-led company will not send a good signal to other companies that have invested billions of dollars in India and are manufacturing their vehicles domestically. In a ‘Make in India’ push, the Centre has asked the electric car company to initiate production in India first.
Tesla India Launch soon?
The Government’s response comes after Tesla wrote a letter to the Road Ministry, requesting it to standardize the tariff on electric cars to 40 per cent and withdraw the social welfare surcharge of 10 per cent on electric cars. It is important to mention that import duty on electric vehicles in India is 100% if the CIF (cost, insurance, and freight) value is more than $40,000 or 60% if the CIF value is less than $40,000. The heavy import duties thereby affect the price of Tesla cars which could considerably shrink its market in India.
The government, however, allows manufacturers to import and sell 2,500 automobiles each year without having to undergo homologation in India. Under its regulations modified in 2018, it would be sufficient to have a conformity certificate from the nation of origin. But Tesla has already chosen to opt and complete the homologation stage for four vehicle models that it has sought approval for in India.
Tesla India Motors and Energy, the India subsidiary of Tesla Inc., has secured permissions for four of its car versions, according to information provided by the Centre-controlled Vahan Sewa. Although it is not mentioned which models or versions have received the permissions, Tesla test cars like Model 3 and Model Y have been previously tested on Indian roads.
Last month, Musk had said that he’s “hopeful” that the green cars would be able to enter the Indian markets with the help of a “temporary tariff relief” from the Government of India. The US electric car manufacturer, Tesla, set foot on Indian soil in January 2021 with an R&D unit in Karnataka’s Bengaluru city.