According to Reuters, India is formulating a new electric vehicle policy, according to Tesla’s proposal, the policy will slash import taxes for some locally-made automakers.
The policy could allow automakers to import entire EVs with a tax cut of as little as 15%, compared with the current 100% tax rate for cars priced over $40,000 and 70% for others, according to two people familiar with the matter.
If the policy is adopted, it may significantly reduce the cost of importing electric vehicles, and it may also open the door for global automakers other than Tesla to enter India. Electric vehicle sales in the Indian market account for less than 2% of total vehicle sales, but are growing rapidly.
Sources also said that low import duties could help Tesla sell its full range of vehicles in India. Other countries have taken similar steps to boost local electric vehicles after Indonesia offered to cut import duties from 50% to zero for electric carmakers planning to invest.
India’s commerce and finance ministries, as well as Tesla, did not respond, and sources said the policy was still in the initial stages of deliberation and the final tax rate could change.
