Rama Krishna Sangem
A major multilateral effort is underway for a new EV (Electric Vehicles) policy in India. In its first official engagement with the Indian government, Elon Musk-led Tesla and other global automotive (auto) manufacturers sought clarification on the new electric vehicle (EV) policy, specifically regarding investment guidelines and the timeline for the domestic value addition (DVA) requirement.
Officials who attended the meeting told Business Standard that the original equipment manufacturers (OEMs) tried to understand whether the complete investment would be made within three or five years and the duration they would have to achieve the 50 per cent DVA.
The consultation meeting was convened to address queries from auto OEMs. We answered the queries regarding the timeline for investment and DVA,” Hanif Qureshi, additional secretary, Ministry of Heavy Industries (MHI), told the paper.
The new EV policy announced last month allows reduced import taxes on OEMs that commit to investing at least $500 million (Rs 4,150 crore) and establishing a manufacturing plant within three years. Additionally, they are also required to achieve a 25 per cent DVA within the initial three years and 50 per cent by their fifth year of operations in the country.
Elon Musk comes to Delhi next week
Tesla was represented by its advisor, The Asia Group (TAG) India, at the stakeholder consultation meeting with the MHI. TAG is a Washington-headquartered strategy and business advisory group. The representation comes days before Tesla Chief Executive Officer Elon Musk visits India.
Other global companies, including VinFast, Mercedes-Benz, BMW, Kia, Volkswagen, Toyota, Hyundai, and Renault-Nissan, were also in attendance. Additionally, Indian car makers such as Tata Motors, Maruti Suzuki, and Mahindra & Mahindra were present at the meeting.
“Officials from the Department of Revenue were also present to provide clarification on the concessional duty notification, which facilitates the incentives outlined in the policy,” Qureshi added.
India rolled out concessional import tariffs for global EV makers in March 2024. It proposes to reduce import duties for interested EV makers to 15 per cent from the current 70 per cent or 100 per cent on vehicles having a CIF (cost, insurance, and freight) value of $35,000 and above for five years from the date of issuance of the approval letter by the government. However, companies seeking the Customs duty relaxation need to invest $500 million within three years.
Musk is expected to meet PM Modi and other Indian policy makers to push for a proactive EV policy in the country soon.
