Govt To Elon Musk: Can’t Have Sales In India, Jobs In China, Zero Tax Incentive For Tesla!

India currently charges customs duty between 60% to 100% on imported cars.

Minister of state for heavy industries Krishan Pal Gurjar has put an end to the debate between Tesla’s Elon musk and the government over lowering import duties on EVs.

He stressed that no relaxations will be provided to Tesla unless it manufactures in India. 

Sell In India? Create Jobs As Well

He said that a situation should not arise where Tesla sells its cars in India but creates jobs in China.

The government is firm that if a company wants to use the Indian market, it must create job opportunities for Indians. 

He told the Lok Sabha that the carmaker has not applied for any schemes or policy, implying that it has no intentions of setting up local manufacturing units and only wants to sell here.

Tesla had sought a reduction in import duties on EVs last year, but the minister told them to build locally before the government considers the request.

Exorbitant Import Duties

India currently charges customs duty between 60% to 100% on imported cars.

100% duty is imposed on fully imported cars with CIF (Cost, Insurance and Freight) value over $40,000.

60% duty is imposed on cars costing less than that amount. 

This means that there is only one car from its lineup that Tesla can sell in India without incurring 100% duty- the Model 3 Standard Range Plus- which is priced below $40,000.

On Indian roads, it would cost roughly around Rs 70 lakh.

Govt Schemes For EVs

Gurjar said that there are Production Linked Incentives for manufacturing automobile, auto components and Advanced Chemistry Cell (ACC) batteries which are open to domestic and foreign players.

There are also schemes and benefits dedicated to promotion of EVs and reducing dependency on fossil fuels such as Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME India) Scheme in 2015.

The government has also reduced the GST on EVs from 12% to 5%, and on chargers/charging stations from 18% to 5%.

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