Big setback for Elon Musk led Tesla in India!
India turned down a demand of Elon Musk’s Tesla Inc. for tax breaks to import electric cars, saying rules already allow bringing in partially-built vehicles and assembling them locally at a lower levy. “We looked at whether the duties need to be re-jigged, but some domestic production is happening and some investments have come in with the current tariff structure,” Vivek Johri, chairman of the Central Board of Indirect Taxes and Customs, said in an interview Thursday. “So, it is clear that this is not a hindrance.”
Prime Minister Narendra Modi’s administration has encouraged Tesla to produce locally, while Musk wants India to lower taxes -- as high as 100% on imported EVs -- to enable the company to first sell vehicles built elsewhere at competitive prices. However, it levies import duties of between 15-30% on parts shipped for assembly in the nation.
Tesla has yet to present a plan for local manufacturing and procurement from India, even after the government asked for it, Johri said. The central budget earlier this week didn’t mention any tax breaks for cleaner but imported vehicles, even though the western state of Maharashtra -- home to financial capital Mumbai -- publicly backed Tesla’s demands.
Politicians from at least five Indian states have invited Tesla to set up shop in their provinces after Musk said last month the U.S. electric-vehicle pioneer was still facing a lot of challenges with the federal government. India has asked Tesla to consider importing so-called knocked-down units or partially built vehicles, which attract a lower import levy, instead of fully-built units.
Tesla should follow the lead of domestic companies like Ltd., which are investing in building local capacity for electric vehicles, Johri
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