Tesla set to benefit from India’s tax reduction policy for electric vehicles

India is set to reduce import taxes on electric vehicles for companies that commit to investing at least $500 million in production facilities within three years. This move is expected to benefit Tesla, which has been seeking a reduction in import taxes to enter the Indian market. Last July, sources reported that Tesla had offered to build a factory in India but was seeking a reduction in import taxes, which CEO Elon Musk criticized as some of the highest in the world.

Under the new tariff policy, companies that meet the investment and production criteria will be able to import a limited number of electric vehicles with a reduced tax of 15 percent on vehicles priced at $35,000 or more. Currently, India imposes a tax of 70 percent or 100 percent on imported cars and electric vehicles based on their value. Commerce Minister Piyush Goyal expressed optimism that India would become a global manufacturing hub for electric vehicles, creating jobs and boosting trade.

Goyal encouraged global companies to consider investing in India, emphasizing the potential for growth and development in the electric vehicle sector. The tariff policy announcement reflects India’s commitment to promoting sustainable transportation and reducing emissions through the adoption of electric vehicles. The government’s support for investment and production in this sector is expected to drive innovation and technological advancement, positioning India as a key player in the global electric vehicle market.