'Not Under Consideration': India Rejects Tesla's Proposal To Cut Import Duties On EV To 40%

Tesla had reached out to the transport and industry ministries requesting a cut import duty cut on electric cars to 40 percent from the current range of 60-100 percent.

Tesla | File Image

Tesla’s ambition to enter the lucrative Indian automobile market seems to have a rough start. India is not considering any plans to cut import duties on electric vehicles after Tesla Inc. appealed to the government to slash taxes.

Tesla’s chief Elon Musk had shown interest in setting up a local factory only after the company starts selling wholly-built units from overseas in India.

Tesla had reached out to the transport and industry ministries requesting them to cut import duty on electric cars to 40 percent from the current range of 60-100 percent, as reported by Bloomberg.

“No such proposal is under consideration in Ministry of Heavy Industries,” stated junior minister Krishan Pal Gurjar in parliament on Monday. The minister was referring to the ministry in charge of making policies for the automobile industry.

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However, the minister informed that the government is taking all the steps to promote the use of electric vehicles by lowering domestic taxes and increasing charging stations.

The response of the minister is seen as the ongoing tussle between India’s efforts to boost local manufacturing and Tesla, which is urging for importing cars at a cheaper rate before the company commits to setting up a factory in the country.

It is quite likely that the world’s largest EV maker will produce cars in India given the company can first begin sales with imported vehicles, the Chief Executive Officer has tweeted about the intentions earlier.

Billionaire Musk has shown interest in entering one of the world’s growing automobile sectors, but complained that the rules restrict the company from making its debut with imports due to high duties which make Tesla cars “unaffordable.”

Tesla is seeking to make inroads into Asia’s third-largest economy, where electric vehicles account for less than 1 percent of annual car sales, compared with about 5% in China.