India has introduced a comprehensive electric vehicle (EV) policy designed to attract global automakers by offering substantial tax incentives. The policy aims to position India as a significant hub for EV manufacturing, aligning with the country's broader goals of environmental sustainability and economic growth.

Key Highlights 

Reduced Import Duties: Automakers committing to invest a minimum of $500 million (approximately ₹4,150 crore) in establishing local manufacturing facilities within three years will benefit from a reduced import duty of 15 per cent on a limited number of EVs, down from the current 70 per cent.

Import Quotas: Companies can import up to 8,000 EVs annually at the concessional rate, provided each vehicle has a minimum cost, insurance, and freight (CIF) value of $35,000.

Domestic Value Addition (DVA): Manufacturers are required to achieve a 25 per cent DVA within three years of commencing operations and 50 per cent within five years.

Bank Guarantee Requirement: To ensure compliance, companies must furnish a bank guarantee equivalent to the total duty foregone or $790 million, whichever is higher.

Also read: Foreign CCTV Giants Face Roadblock in India Over New Security Rules

Tesla's Stance 

Despite the policy's favourable terms, Tesla has indicated no current plans to establish manufacturing operations in India, focusing instead on setting up sales outlets. India's new EV policy represents a significant step toward transforming the country into a global hub for electric vehicle manufacturing. By offering substantial incentives to foreign investors while setting clear expectations for local value addition, the policy seeks to balance the interests of global and domestic stakeholders in the EV sector.