India denies Tesla's proposal to cut import duties on electric vehicles

Addressing a question in the ongoing monsoon session of the Parliament, the central government informed that it has no plans to cut the taxes on the import of electric vehicles. This comes after, Tesla Inc ltd founder Elon Musk appealed to the government to reduce tariffs, so that it can sell its cars in the country at a cheaper price and also floated the possibility of setting up a local manufacturing factory in India in the coming years.

India blows Tesla's proposal to cut import duties on electric vehicles

“No such proposal is under consideration in Ministry of Heavy Industries," junior minister Krishan Pal Gurjar informed parliament on Monday, referring to the ministry, which takes the major decisions for the auto industry.

Meanwhile, he also added that the central government is taking measures to promote the use of electric vehicles and cars, by lowering taxes on them and by adding charging stations at multiple places. Currently, the reply is being perceived, as a response to Tesla, that the incumbent government wants to boost local manufacturing and will reduce domestic taxes on products, if they are manufactured in the country, clearly suggesting that India wants Tesla to first establish local manufacturing. On the other hand, Tesla wants India to allow it to import cars more cheaply before it sets up a local factory. Reportedly, to persuade the Indian government, Tesla last month wrote to the transport and industry ministries requesting them to cut import duty on electric cars to 40% from the current range of 60%-100%, as per Bloomberg.

Elon Musk Eager to enter Indian markets

Elon Musk is desperate to launch its cars in Asia’s third-largest economy but has often complained that it is unable to test the market, because of the Indian government’s inflexible import duties, which will make Tesla cars unaffordable. Tesla’s expansion in Asia by setting up a factory in the second-most populous nation seems possible only if the electric automaker can first begin sales with imported vehicles. CEO Elon Musk is eager to enter into Indian markets, where electric vehicles account for less than 1% of annual car sales, compared with about 5% in China. The sparse charging infrastructure and expensive cost have deterred large-scale adoption of electric vehicles in India.

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