Officials told Reuters that the Indian government is considering reducing the import tariff for cars under US$40,000 (approximately US$3 million) from 60% to 40%, and the import tariff for cars over US$40,000 from 100% to 60%. One of the officials said: “We have not yet decided on tariff cuts, but discussions are ongoing.”

Although India is the world’s fifth largest car market, with annual sales of approximately 3 million vehicles, most of the cars sold in India cost less than US$20,000 (approximately 1.5 million vehicles). According to industry estimates, electric vehicles for the mass market or luxury goods account for only a small portion of total sales.

Reducing import tariffs: the bane of local manufacturing?

Tesla’s call to lower import tariffs has sparked a rare debate among automakers as to whether the move will contradict India’s domestic manufacturing work. According to officials, if the government sees that companies like Tesla can bring some benefits to the domestic economy by manufacturing locally or at least giving a timetable when they can do so, the government will consider cutting import tariffs.

“Reducing import tariffs is not a problem because the country does not import many electric vehicles. But we need to get some economic benefits from it. We must also balance the concerns of domestic players,” the official said.

Tesla has said that the success of its imported cars will affect its plans to manufacture locally in India. One of the officials pointed out that because the tax cuts only consider electric vehicles and not other categories, this should not be a big problem for domestic manufacturers that mainly produce affordable gasoline-powered vehicles.

Previously, Indian luxury car manufacturers liked Benz and Audi It also lobbied to lower taxes on imported vehicles. Their failure was mainly due to opposition from competitors in the domestic business. Officials said that the proposal is currently being discussed by the Indian Ministry of Finance and Commerce, and the federal think tank NITI Aayog, and the final decision will be made after consulting all stakeholders.

Another source with knowledge of the matter told Reuters The government acknowledges that Tesla’s entry will make electric vehicles more permeable in India, which lags behind other major car markets in terms of electric vehicle sales. The person familiar with the matter said that the government is considering the best way to solve this problem and wants to ensure that they benefit, even if it means that Tesla only promises to purchase parts domestically.

The industry’s response to Tesla’s call

Recent events have polarized the Indian auto industry.Tesla’s position is Supported by companies such as Hyundai India And Mercedes-Benz, they both sell imported electric cars in the country.

However, other companies, such as Ola Electric, which is about to launch locally-made electric scooters in India, and Tata Motors, which produces affordable electric cars locally, still support stimulating domestic manufacturing.

Tesla enters the Indian market

Earlier this year, the electric car manufacturer established Indian subsidiary -Tesla India Motors and Energy Pvt. Ltd. company is expected to launch Model 3, This has been Spy test On our way, in the country this year. As a fully imported electric car, it is expected to sell for approximately Rs 6 million (ex-showroom).

See also:

Tesla infotainment user interface can get Hindi support

Tesla Model X India review, test drive