The UK has proposed customs duty concessions on electric vehicle (EV) exports to India under the free trade agreement (FTA) negotiations, the media has reported. However, no official decision has been made on the matter as of now, says a report by news agency PTI. There is a demand to provide concessions on a specified number of vehicles per year, an official was quoted as saying. The fast-growing Indian EV market is catching the eyes of global players. The government is also reviewing a proposal from EV maker Tesla, led by tech billionaire Elon Musk that sought a reduction in tariffs for imported EVs as it explores the possibility of establishing a manufacturing facility in the country.
Currently, Tata Motors is the leading player in passenger EVs in India. The company's current EV portfolio comprises Nexon EV range, Tiago EV and Tigor EV. The talks for the FTA are underway, and both sides are discussing issues that are slightly complex in nature.
The UK is also looking at phasing out ICE (internal combustion engine) vehicles by 2035, and the British auto market is export-driven. According to the opinion of experts, Europe is the primary export destination for the UK's vehicles, prompting a desire to broaden export destinations. As per an unnamed official, the UK is seeking concessions on electric vehicles from India as part of the current free trade agreement negotiations, the report noted.
India's electric vehicles market is expected to grow to one crore units in annual sales by 2030 and create five crore direct and indirect jobs, according to the Economic Survey 2022-23. As per industry estimates, the total EV sales in India stood at around 10 lakh units in 2022.
On the back of increasing EV demand, the Indian government is providing fiscal incentives to promote domestic manufacturing of these cars. It is also attracting US major Tesla to set up a plant in India. The government has rolled out production-linked incentives (PLI) schemes for advanced chemistry cell (ACC) battery storage with an outlay of Rs 18,100 crore and Rs 26,058 crore PLI scheme for auto, auto-components and drone industries.