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The Central Government has ruled out any chances of reduction in import duties for electric cars. This comes as a blow to companies like Tesla that seemed to have had big hopes on the reduced import duties for their upcoming electric cars in the country.
The decision from the Central government also negates Tesla's hopes of introducing its electric vehicles at a friendlier price point in the Indian market. Reflecting on this Krishan Pal Gurjar, Minister of state for Power and heavy Industries said "No such proposal is under consideration in Ministry of Heavy Industries."
This statement has cleared the air on rumours that the import duties for electric cars in the country could be reduced. The centre has no special proposal to ease the US-based electric car giant's entry in the country.
The above statement Mr Gurjar comes just a week after Tesla CEO Elon Musk's tweet, where he said that he was hoping for 'temporary tariff relief for electric vehicles.'
India's import duties are the highest in the world, when compared to any large country.
Automobile manufacturers in India were divided on their opinions with relation to the reduction of import duties. While manufacturers like Hyundai supported the idea of Tesla's request, Tata motors on the other hand asked for equal treatment.
Even Ola Electric, which is set to launch its first-ever electric scooter, was of the opinion that the government should focus more on promoting local manufacturing.
India currently imposes a 60 per cent import duty for vehicles whose value is below $40,000, and for anything above the said value, the import duty jumps to 100 per cent.
Even though the centre has ruled out the idea of reduction of import duties on electric cars, it is not the ‘end of the tunnel' for electric cars in India.
Mr Gurjar said that there are many other schemes from the central government to promote the usage of electric cars such as the FAME II scheme and the government is also helping to install EV charging stations.
Thoughts On Central Government Denying Reduction In Import Duties
Tesla revolutionised the whole automotive industry with its electric cars. However, we are yet to see how they perform in ‘Desi' conditions. One of the biggest challenges the company may face in India apart from the import duty is the availability of charging infrastructure in India.