The Ministry of Heavy Industries (MHI) has approved new electric vehicle (EV) policy to promote India as a manufacturing destination for e-vehicles.

National

The Ministry of Heavy Industries (MHI) has approved a scheme to promote India as a manufacturing destination so that e-vehicles with the latest technology can be manufactured in the country. The policy is designed to attract investments in the e-vehicle space by reputed global EV manufacturers. The new policy entails lower import taxes on certain electric vehicles for companies committing to at least $500 million (Rs4,150 crore) in investment and a manufacturing plant within 3 years. It proposes to reduce import duties for interested EV makers to 15% from the current 70% or 100% on vehicles having a CIF (cost, insurance and freight) value of $35,000 and above for a period of five years from the date of issuance of the approval letter by the government. The policy allows all international players, including Chinese manufacturers, to qualify for a duty reduction, provided they establish manufacturing facilities within 3 years and achieve a localisation level of 50% by their fifth year of operations in the country. Under this scheme, EV passenger cars (e-4W) can initially be imported with a minimum CIF value of $35,000 (Rs29 lakh), at a duty rate of 15% for a period of 5 years from the date of issuance of approval letter.


      This proposed duty structure aligns with the demands made by Elon Musk-promoted Tesla in its discussions with the Indian government.

      Currently, fully assembled completely built-up (CBU) vehicles priced at more than $40,000 attract a 100% tax.

      Those priced below $40,000 are subject to a 70% tax.

 

     


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