The Tesla lineup.
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Is Tesla’s India entry on the cards? Govt introduces a new policy that lowers import duty on EVs

The duties will be as low as 15 per cent provided the brand sets up its manufacturing facility in India in three years

For a long time, Tesla has shown interest in setting up its manufacturing facility in India. But heavy import duties have prevented them from doing so. Now, however, that might change. The Government has introduced a new policy that lowers the import duties to 15 per cent but has also put conditions that need to be met by the manufacturer to gain an advantage from the policy. Here’s what you need to know:

  • Minimum investment of ₹4150 crore

  • 3 years timeline for setting up manufacturing facilities and starting commercial production

  • 50 per cent domestic value addition to be reached within 5 years (25 per cent to be reached by the 3rd year)

  • Under this policy, a maximum import limit of 40,000 EVs at the rate of 8,000 per year is set if the investment is $800 million (₹6,628 crore) or more

  • A customs duty of 15 per cent would be applicable on vehicles of a minimum value of $35,000 (₹29 lakh) for a total period of 5 years

This policy aims to attract big EV manufacturers like Tesla, who have been reluctant to come to India due to the high import duties. However, This policy eases that and allows manufacturers to set up their plants in India at a lower cost. The government says they aim to promote India as a manufacturing destination for EVs while also boosting the Make in India initiative, strengthening the EV ecosystem and ultimately benefitting the economy. This policy if it works as intended, might bring big EV manufacturers like Tesla, BYD, Lucid and Rivian to our shores.

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