Government Grants Equal Incentives to Local Car Makers and Foreign Car Makers
Indian government officials have stated that any incentives provided to encourage the local production of electric vehicles will be equally available to both domestic and foreign investors. This statement comes amidst concerns raised by Indian automakers about the possibility of import duty concessions being offered to American carmaker Tesla.
While the Indian government is working on policies to encourage the local manufacturing of electric cars, Tesla, the American EV maker, and VinFast, its lesser-known Vietnamese competitor, are planning to enter the Indian market. Although the policy guidelines are not yet finalized, local car manufacturers have expressed concerns that providing concessional tariffs to Tesla could negatively impact the investments they have already made or are making in producing electric vehicles.
“The government’s approach is for the industry as a whole and not for any specific company because we have very strong domestic companies in this sector,” a government official said while declaring that incentives granted will be equal for both local and foreign EV makers.
Apart from Tata Motors and Mahindra & Mahindra, other automakers like Maruti Suzuki and Hyundai-Kia plan to introduce over a dozen electric cars by 2030. Hyundai will invest ₹20,000 crore in Tamil Nadu, while Suzuki Motor Corp will invest ₹7,300 crore in setting up a battery plant in Gujarat.
In a social media post X, Goyal stated, “Visited @Tesla’s state of the art manufacturing facility at Fremont, California. Extremely delighted to see talented Indian engineers & finance professionals working at senior positions and contributing to Tesla’s remarkable journey to transform mobility. Also proud to see the growing importance of auto component suppliers from India in the Tesla EV supply chain. It is on its way to double its components imports from India. Missed Mr @ElonMusk’ magnetic presence and I wish him a speedy recovery.”
The Indian government has reassured local electric vehicle (EV) manufacturers that any incentives aimed at promoting local EV production will be equally accessible to both domestic and foreign investors. This comes after concerns were raised that US automaker Tesla might receive preferential treatment in the form of import duty concessions. Tesla has been pushing to reduce customs duty on imported vehicles until a local factory is established. The Department for Promotion of Industry and Internal Trade, which operates under the Ministry of Commerce and Industry, has been in high-level discussions to implement a scheme that provides subsidies to EV manufacturers investing in local production.
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