India is gearing up to welcome global electric vehicle (EV) giants like Tesla to set up operations in the country but with a unique twist. The proposed EV policy, rooted in the ‘Make in India’ initiative, aims to encourage not just assembly but significant manufacturing within the country. This blog post delves into the key aspects of the new policy and how it may reshape the landscape for EV makers.
Make in India Requirement:
- The EV policy is anticipated to include a Make in India requirement to ensure that companies engage in substantial manufacturing on Indian soil.
- This stipulation is aimed at promoting local production and aligning with India’s broader economic objectives.
Reduced Import Taxes for Local Manufacturing Commitment:
- The Indian government is contemplating a policy that would offer reduced import taxes to companies committing to local manufacturing.
- Automakers could benefit from a significantly lower tax rate, possibly as low as 15%, for fully-built EV imports compared to the current 100% for high-value cars.
Sector-Wide Impact:
- The policy is designed to apply uniformly across the EV sector rather than favoring specific companies, ensuring a level playing field.
- Local manufacturing is expected to receive a substantial boost, contributing to the growth of the entire EV industry in India.
Potential Flexibility for Importing Parts:
- The government may consider allowing companies like Tesla to import parts from specific Chinese suppliers on a case-to-case basis.
- This approach has precedence, as India previously allowed some iPhone makers’ Chinese suppliers to form joint ventures for domestic smartphone manufacturing.
State-Level Incentives:
- States are anticipated to play a crucial role in attracting EV manufacturers, with additional incentives offered at the state level.
- States like Gujarat, Maharashtra, and Karnataka have actively expressed interest, showcasing their ecosystems and incentives to entice global players.
Varied State Incentives:
- Different states are formulating their incentives to augment the central government’s policies.
- Gujarat, for instance, offers subsidies for two-wheelers, three-wheelers, and four-wheelers, while Tamil Nadu provides GST reimbursement for EVs sold within the state.
India’s push towards electric mobility is taking a significant step forward with the proposed EV policy. By blending national and state-level incentives and emphasizing local manufacturing, the policy aims to create a conducive environment for global EV giants. As Tesla and other companies navigate this dynamic landscape, the future of EVs in India promises exciting possibilities, aligning with the country’s sustainable development goals.