Tesla has urged Indian Prime Minister Narendra Modi’s office to slash import taxes on electric vehicles before EV manufacturers enter the Indian market.
According to a Reuters report, some Tesla executives, including Manuj Khurana, its head of policy and business development in India, took company demands to officials in the Prime Minister’s office during a closed-door meeting.
During the meeting, Tesla executives said that India’s duty structure would make the company’s entry into the country unviable. According to the report, the company has also requested a meeting between Elon Musk and PM Narendra Modi.
Currently, India levies import duties between 60% to 100% of the car’s value for completely built-up units (CBUs). If the car’s CIF value (Cost, Insurance and Freight) is under $40,000 and if the car’s engine capacity is under 3000 cc for petrol engines and 2500 cc for diesel engines, the import duty is 60%.
If either the price or the engine capacity goes above this limit, the duty becomes 100%.
The bone of contention for Tesla is that these import duties also apply for electric vehicles, with no concession. Earlier this year, Tesla CEO Elon Musk had complained about import duties in India being ‘the highest in the world’ when asked about Tesla’s India plans. He also said that a factory in India would be likely if the company succeeded with imported vehicles.
The Indian government had turned down Musk’s initial requests to slash import taxes in the country. The Ministry of Heavy Industries reportedly asked Tesla to begin manufacturing its vehicles in India before any tax concessions can be considered.
Many domestic manufacturers, however, are opposed to the slashing of import duties. Ola Electric’s Bhavish Aggarwal took on Hyundai Motors India’s CEO SS Kim and Elon Musk to say India should build indigenously instead of importing cars.
Earlier month, while speaking at a media conference, India’s Union Minister for Road Transport and Highways Nitin Gadkari said that Tesla had been asked not to manufacture cars in China to sell them in India.