India may relax import tax rules for Tesla and other electric car makers

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New Delhi: The Indian government is keen to attract Tesla and other electric car makers to the country and is considering easing some of their demands. One of the main issues that Tesla has raised is the high import tax on fully-built cars. The government is thinking of reducing this tax significantly. Experts say that this move may pose a challenge to Indian car makers like Tata and Mahindra, but it will also create healthy competition that will benefit the consumers and prevent unfair pricing in this sector.

Sources say that the government is working on a new policy for electric vehicles. Under this policy, electric car makers who set up some manufacturing facilities in India may get an exemption from import tax. The new policy may also slash the import duty on fully built cars from abroad from 100% to 15%. Currently, cars priced above $40,000 are charged 100% import duty and other cars are charged 70% import duty. Tesla’s most popular car is the Model Y, which costs $47,740 in the US. This means that if Tesla wants to bring it to India, it will have to pay only 15% import tax instead of 100%.

It is worth noting that Tesla tried to enter India in 2021, but it faced difficulties due to the high import tax. After Tesla’s CEO Elon Musk met Prime Minister Narendra Modi in the US in June this year, there were renewed hopes of Tesla’s entry into India. It is reported that Tesla has promised the government that it will start full-scale production in India by 2030. If Tesla succeeds in this venture, it may also encourage other foreign electric car makers to invest in India, which will create new jobs in the country.