According to a recent report Tesla Inc is preparing to commit up to $2 billion for the establishment of a factory in India. The company expresses this willingness contingent on the government reducing import duties on Tesla vehicles to 15% during the initial two years of operations, as reported by the Economic Times on Friday.
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Tesla Demands Lowering Import Duty to 15%
As per a report by Reuters, India is in the process of formulating a new electric vehicle (EV) policy. This aims at significantly reducing import taxes, potentially lowering them to as little as 15%. In contrast to this, the existing rates are at 100% for cars exceeding $40,000 and 70% for those below this threshold. The reduction is expected to be contingent on manufacturers committing to a degree of local production. As per unknown sources, Tesla is preparing to invest $500 million. But this is only if the government reduces import duty for 12,000 vehicles.
Additionally, the electric vehicle (EV) manufacturer is open to a more substantial investment of up to $2 billion if the concession extends to 30,000 vehicles. The government is reportedly reviewing the feasibility of Tesla’s $2 billion investment proposal. However, it intends to decrease the quantity of cars subject to a lower duty. This could be a sizeable reduction from Tesla’s suggested numbers. No immediate responses to Reuters’ requests for comments were received from Tesla, the Department for Promotion of Industry and Internal Trade, the Ministry of Heavy Industries, the Ministry of Road Transport & Highways, and the Ministry of Finance.
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PMO Asks Govt to Fast-Track Approvals For Tesla
Earlier this month, it came to light that Prime Minister Office (PMO) has told government departments to expedite approvals for Tesla in India by January 2024. Previous discussions have occurred in both India and the United States. These include a meeting between Prime Minister Modi and Elon Musk during Modi’s recent visit to the US. Subsequent to that meeting, Musk revealed Tesla’s plans for a significant investment in India. Tesla has been asking government to lower import duties for a while now. This directive from the PMO suggests that progress on this front may be imminent.
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