Tesla is seeking tariff cuts that would allow it to pay lower customs duties for its cars depending on their price and engine size.
Updated March 10, 2024 | 05:52 PM IST
Piyush Goyal had visited Tesla’s manufacturing facility in Fremont, California in November last year. (Image: Shutterstock/ET Now News)
India’s Commerce and Industry Minister Piyush Goyal has said that the country will not bend its policies in favor of American electric vehicle (EV) giant Tesla or any other foreign carmaker. In an interview with PTI, he said India will create laws and tariffs that will attract EV manufacturers from around the world to invest in the world’s fastest growing economy.
Tesla is seeking tariff cuts that would allow it to pay lower customs duties for its cars depending on their price and engine size. But Goyal said that the government will not make policies based on the demands of any one company. He said the government is aware of the need for a strong EV sector, as it will help reduce carbon emissions, oil imports, pollution, inflation and interest rates while boosting the economy and environment.
Tesla has demanded tariff cuts
Goyal was replying to a question whether the government was considering giving any concession to Tesla to set up a factory in India. Tesla has said it wants tariff cuts as a precondition for building the plant in India, which would be its sixth in the world. Tesla CEO Elon Musk had met Prime Minister Narendra Modi in New York last year and said he planned to visit India in 2024.
Goyal said the government is working on several initiatives and is in talks with stakeholders and potential investors from Europe, the US, Far East, Japan and Korea. He said India is an alternative investment destination for American companies as relations between the US and China are deteriorating. India is the world’s third-largest energy consumer and wants to promote EVs as a way to fight climate change.
To attract EV players, the government has launched production-linked incentive schemes for advanced battery storage and component manufacturing.
Britain has also raised a similar demand
Goyal had visited Tesla’s manufacturing facility in Fremont, California in November last year. The company purchased goods worth about US $ 1 billion in 2022.
The government has launched production linked incentive schemes (PLI) for Advanced Chemistry Cell (ACC) battery storage with a budget of Rs 18,100 crore and PLI scheme of Rs 26,058 crore for auto, auto-components and drone industries.
The UK, which is in talks with India for a free trade agreement, is also seeking customs concessions on exports of electric vehicles under the proposed agreement. The rapidly growing EV market in India is attracting global players. The UK also plans to phase out ICE (internal combustion engine) vehicles by 2035, and the British auto market is export-oriented.
India is the fastest growing EV market
According to experts, the UK’s main export destination for vehicles is Europe, and they are looking to diversify their exports. According to the Economic Survey 2022-23, India’s electric vehicle market is expected to grow annual sales to one crore units by 2030 and generate five crore direct and indirect jobs.
According to industry estimates, total EV sales in India in 2022 were around 10 lakh units. In India, Tata Motors is the leading player in passenger electric vehicles. The company’s current EV portfolio includes the Nexon EV range, Tiago EV and Tigor EV.