The Indian government has slashed import duties on electric vehicles from 110% to 15% under a new EV policy, aiming to boost EV adoption.

 

⚡ EV Import Duty Reduced

The Indian government has slashed import duties on electric vehicles from 110% to 15% under a new EV policy, aiming to boost EV adoption.

Key Highlights of the New EV Policy

1. Reduced Import Duty: Import duties on fully built electric vehicles priced above $35,000 (approximately ₹30 lakh) have been slashed from 110% to 15%. 

2. Investment Requirement: To avail of the reduced duty, automakers must commit to investing at least ₹4,150 crore (around $500 million) in establishing EV manufacturing facilities in India within three years. 

3. Import Cap: Eligible manufacturers can import up to 8,000 EVs annually at the reduced duty rate. Unused quotas can be carried over to subsequent years. 

4. Localization Targets: Manufacturers are required to achieve 25% local value addition by the third year and 50% by the fifth year of operations. 

5. Revenue Milestones: Companies must meet annual turnover targets: ₹2,500 crore by the second year, ₹5,000 crore by the fourth year, and ₹7,500 crore by the fifth year. 

6. Eligible Investments: Investments can include expenses on research and development, machinery, and charging infrastructure (up to 5% of the total investment). Land and building costs are excluded from the mandatory investment threshold.

Industry Response

Several global automakers, including Mercedes-Benz, Skoda, Volkswagen, Hyundai, and Kia, have expressed interest in participating in the scheme by setting up manufacturing operations in India. 

However, Tesla has indicated that it is currently interested only in establishing sales outlets in India and does not plan to set up local manufacturing facilities, making it ineligible for the reduced import duty benefits under the new policy. 

This policy aims to boost domestic EV production, reduce reliance on imports, and increase the share of electric vehicles in India's car market from the current 2.5% to 30% by 2030.