Tesla In India: Finally, the Government of India has approved a new policy to promote the sale of electric vehicles in the field of EVs, under this new policy any electric vehicle manufacturer can invest at least Rs 4,150 crore. Maximum investment No limit has been set.
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Companies will have to set up manufacturing facilities in India within 3 years
According to this policy, investing companies will have to set up manufacturing facilities in India within 3 years and start commercial production of EVs. As an incentive, companies investing in EV manufacturing facilities will be allowed limited import of cars at lower custom duty rates.
Production at 50 percent local level by the fifth year
Which means that 15 per cent (as applicable on CKD) will be charged as custom duty on cars with cost, insurance and freight (CIF) value of more than USD 35,000 (more than Rs 29 lakh), if the manufacturer has a 3-year warranty. Sets up a manufacturing facility in India within the period. Additionally, they are required to achieve 25 percent local production by the third year and 50 percent by the fifth year.
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Open doors for Tesla
Let us tell you that American EV manufacturer Tesla has been lobbying with the government for many years to reduce the import duty. Although the government did not agree with this idea, it was facing opposition from Indian and foreign manufacturers who are working in India because they have been localizing their products for years.
Make in India initiative will get a boost
“It will provide Indian consumers access to the latest technology, boost Make in India initiatives and strengthen the EV eco system by promoting healthy competition among EV companies, leading to high-volume manufacturing, production and distribution,” the government said in a statement. Lower cost will reduce crude oil imports. “Reduce the trade deficit, reduce air pollution, especially in cities, and have a positive impact on health and the environment.”
Annual Import Limit
Duty waiver on total number of EVs for total imports will be limited to investment or Rs 6,484 crore (equivalent to incentive under PLI scheme), whichever is lower. If the investment is USD 800 million (over Rs 66,000 crore) or more, a maximum of 40,000 EVs, or 8,000 EVs per year, will be allowed. Carryover of unutilized annual import limit will be allowed.
Dilution of shareholding will not be allowed during the period of the scheme
The investment commitment made by the company will have to be backed by a bank guarantee against the customs duty waived. Bank guarantee will be invoked in case the minimum investment criteria as defined under the scheme guidelines is not achieved. Additionally, the companies whose creditworthiness has been considered for selection of applicants under the Scheme will not be permitted to reduce their shareholding (direct or indirect) in the applicant during the period of the Scheme.
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