Govt. approves new EV policy paving the way for Tesla to enter India

Companies will be allowed to import 8,000 EVs per year at a lower import duty of 15%.

The Government of India has approved a new EV policy that will pave the way for global brands like Tesla to enter the Indian market. A statement issued by the Ministry of Commerce and Industry states that the policy will help attract investments in the e-vehicle space from reputed global EV manufacturers. 

According to the government, companies will have to invest a minimum of Rs 4,150 crore in the country. They will have 3 years to set up a local manufacturing unit for EVs with at least 25% localization. 

Under the new policy, companies will be allowed to import 8,000 EVs per year at a lower import duty of 15% on cars costing $35,000 and above, which is significantly lower than the 70-100% currently levied on imported cars.

The duty waiver on EVs, which can be imported is capped at the annual PLI incentive (Rs 6,484 crore) or the investment made by the entity, whichever will be lower. 

The investment commitment made by the company will have to be backed up by a bank guarantee in lieu of the custom duty forgone. The bank guarantee will be invoked in case of non-achievement of DVA and minimum investment criteria defined under the scheme guidelines.

Source: Moneycontrol