rewrite this title India set to slash EV import duty from 110 per cent to 15 per cent: Tesla, Hyundai and VW show interest

The Indian government is reportedly gearing up to introduce a game-changing Electric Vehicle (EV) policy that aims at slashing import taxes and attracting global automakers like Tesla. This significant move could revolutionise India’s EV landscape by making premium electric vehicles more affordable for Indian consumers.

Massive import duty cut to attract global giants

• Under the new policy, the import duty on premium EVs (priced above USD 35,000) will be reduced from the current 110 per cent to just 15 per cent.
• This dramatic tax cut is aimed at luring international EV makers and encouraging them to invest in India’s growing EV market.

Investment and turnover requirements for manufacturers

To qualify for the reduced import duties, global EV manufacturers will need to meet the following conditions:

• A minimum investment of Rs 4,150 crore (excluding past investments and land or building costs).
• Establish assembly units, potentially within existing facilities.
• Reach a turnover of Rs 2,500 crore by the second year.

The policy also outlines future targets:

• Rs 5,000 crore by the fourth year
• Rs 7,500 crore by the fifth year

Application window and local manufacturing targets

Companies will have 120 days to apply for the scheme once it is officially announced. Those approved will be allowed to import up to 8,000 premium EVs annually at the reduced import duty rate.

Additionally, approved manufacturers must:

• Achieve 25 per cent local value addition within the first year, increasing to 50 per cent within 5 years.
• Set up local manufacturing facilities within 3 years of approval.

Tesla’s big plans for the Indian market

Industry insiders further believe that Tesla will be one of the biggest beneficiaries of this new policy on EVs.

The company is reportedly planning to:

• Launch a budget-friendly EV in India by April 2025, priced between Rs 21–22 lakh.
• Open its first showrooms in Delhi and Mumbai.
• Begin importing vehicles to a port near Mumbai in the coming months.
• Expand sales to Bengaluru, Delhi, and Mumbai by the third quarter of 2025.

Hyundai and Volkswagen also eye opportunities

Other major automakers, including Hyundai and Volkswagen, have shown interest in participating in the scheme during discussions with the government. While their investment plans are yet to be confirmed, both companies are reportedly exploring the possibility of bringing premium EVs to India.

Boosting domestic production and EV affordability

The government’s strategy is expected to:

• Accelerate EV adoption in India.
• Encourage domestic production of electric vehicles and components.
• Make luxury EVs more affordable for Indian consumers.

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