Despite India typically imposing high import taxes ranging from 60 percent to 100 percent on luxury cars, the government wants to welcome foreign electric car manufacturers like Tesla. The centre wants these companies to commit to making cars in India for the long run and creating job opportunities locally.
Present Car Import Duties
At present, India charges a 100 percent import duty on cars valued above USD 40,000 (around Rs 33 lakh) including cost, insurance, and freight. For cars valued below this amount, the import duty is set at 60 percent.
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Why are high import duties levied?
High import duties on cars in India are levied to promote local manufacturing, protect domestic industries, and generate revenue. If importing vehicles to India becomes expensive, it will encourage foreign automakers to establish manufacturing plants locally, creating jobs and boosting the economy. This works both ways as India is one of the largest passenger vehicle markets globally and luxury carmakers including the likes of Mercedes and Audi have recently posted their best-ever sales in India last year.
Is it unfair for local EV manufacturers?
It remains to be seen if the policy will be implemented but if it gets the thumbs up from the centre, it wouldn’t directly affect Indian carmakers producing EVs, primarily aimed at the entry-level segment. These high-end models cater to a different market segment and aren’t aimed at the mass market. Therefore, the impact on Indian carmakers would be limited, as they focus on different price points and customer base.
 market, the government is considering offering concessional import duties on Tesla cars. Read more to know the details.){kind=link}