India’s new policy currently has no constraints on electric vehicle imports from any country, even China, as a senior government official emphasized in a statement to CNBC-TV18 on Tuesday.
India has no restriction on EV import from any country, even China
India’s Department for Promotion of Industry and Internal Trade (DPIIT) Secretary Rajesh Kumar Singh assured global electric automakers that the country currently does not restrict Chinese imports.
Secretary Rajesh even cited China-made BYD EVs, which are already present on the country’s roads as they adhered to the necessary import tariffs.
“There is no restriction on import from China per say. BYD vehicles are already on roads after paying duties.”
DPIIT Secretary Rajesh Kumar Singh
The DPIIT Secretary further explained that the new policy only restricts investments from land-border countries. Any country can import electric vehicles provided they pay duties and follow domestic value-adding criteria.
“Only restriction that exists is on investments from land border countries. FDI from China is difficult, imports are theoretically possible under present regime, I cannot comment on what happens in future. Under existing policy regulations there is no restriction on imports from China as long as companies pay duties and meet domestic value addition criteria.”
DPIIT Secretary Rajesh Kumar Singh
New policy highlights
India finally approved a new electric vehicle policy in mid-March. According to the Ministry of Heavy Industries, the government will cut taxes on select electric vehicles imported by foreign car companies on one condition: they must commit to investing at least $500 million in local manufacturing within three years.
Electric automakers agreeing to establish local manufacturing will benefit from a lower tax rate of 15% for a maximum of 8,000 EVs annually. This rate only applies to models with at least $35,000 CIF value.
Moreover, foreign electric vehicle brands must hit a minimum Domestic Value Addition (DVA) of 25% by the third year of production and 50% within a maximum of 5 years.
“The Government of India has approved a scheme to promote India as a manufacturing destination so that e-vehicles with the latest technology can be manufactured in the country. The policy is designed to attract investments in the e-vehicle space by reputed global EV manufacturers.”
India’s Ministry of Heavy Industries
Tesla’s potential market entry
Secretary Rajesh omitted from sharing details about the prospect of Tesla agreeing to the duty concessions under the country’s new electric vehicle policy.
“I will only say that policy has been well received by companies outside India and global companies already present in India. I will leave it to the companies to make their own commercial business announcements.”
DPIIT Secretary Rajesh Kumar Singh
Secretary Rajesh asserted that India had developed a “balanced” policy that gained good feedback from various stakeholders. It apparently even convinced those who were originally opposed to the new policy.
As of now, imported cars as completely built units pay customs duty ranging from 70% to 100%. The rate depends on various factors, including engine size and cost, insurance, and freight value less or exceeding $40,000.
