Amidst reports indicating India’s contemplation of reducing import duties on completely built units of electric vehicles, Minister of Commerce and Industries, Piyush Goyal, who is actively involved in negotiating a Free Trade Agreement with the United Kingdom, stated that the Indian automobile industry is confident and unafraid of competition.
Speaking at the announcement of the Bharat Mobility Global Expo, Goyal emphasized the industry’s confidence, stating that India’s car makers can compete with anyone globally. Recent reports suggest that the government is considering a reduction in duties for British electric vehicle manufacturers in the proposed FTA with the UK, with the condition that they localize 45 percent of their components. The government has communicated to domestic automakers that a lower duty for importing electric cars is likely in the proposed FTA.
FTA negotiations with the UK are in advanced stages, and the government aims to conclude discussions before the scheduled Lok Sabha elections in April and May. Some automakers, including Tata Motors and Mahindra & Mahindra, have expressed concerns to the government about plans for a lower import tax on electric vehicles.
On the other hand, Maruti Suzuki, India’s largest passenger vehicle maker, supports a reduction in higher import taxes on cars from the UK and European Union. Chairman RC Bhargava stated that India is as competitive as the UK and the EU in cars, with costs being 20-30 percent lower in India for many models. He suggested that a 30% import duty is acceptable.
Currently, India imposes a 100 percent import duty on cars with a cost, insurance, and freight value over $40,000, while those under $40,000 face a 70% import duty.