New EV Policy to Boost Indian Electric Vehicles Market, Says DPIIT Secretary

In a significant development, the Department for Promotion of Industry and Internal Trade (DPIIT) Secretary, Rajesh Kumar Singh, has clarified that the import duty concessions announced in the recently unveiled electric vehicle (EV) policy will not negatively impact domestic players. Instead, he emphasized that the policy aims to expand the Indian electric vehicles market and bring in new players.

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Balanced Policy for Public Interest

Singh highlighted that the government carefully considered the views of all stakeholders before finalizing the policy. He stressed that the policy is well-balanced and designed to serve the public interest. The government's intention is not to tailor the policy to benefit specific entities but to create an open and competitive environment that encourages the growth of the EV industry in India.

Limited Imports with Stringent Norms

The DPIIT Secretary explained that the policy allows for limited imports of electric vehicles to kickstart the four-wheeler e-car manufacturing in India. However, these imports will be subject to stringent value-addition norms. The government will permit only 8,000 imports per company per year, with a maximum cap of 40,000. Additionally, the import duty concessions will be available only for vehicles costing USD 35,000 and above.

Attracting Global Players

The EV policy aims to attract major global players like Tesla to set up manufacturing units in India. These companies will be allowed to import a limited number of cars at a lower customs/import duty of 15% for a period of five years. This move is expected to bring in new technologies, accelerate the transition to EVs, and create a competitive framework that fosters the growth of domestic manufacturers.

Expanding the EV Market

Singh emphasized that the policy's primary objective is to expand the EV market in India by bringing in new players and offering consumers access to the latest technologies. He clarified that the intention is not to cannibalize the domestic players' market but to create a larger market that benefits both domestic and global manufacturers.

Discussions with Tesla and Others

When asked about discussions with Tesla, Singh confirmed that the government engages in discussions with various stakeholders, but these discussions do not solely influence policy decisions. The final decisions are made based on what is in the best interest of the country and the public.

Limited Concessions with Performance Criteria

Singh reiterated that the import duty concessions are limited and subject to stringent performance criteria guarantees from the companies. He highlighted that the customs duty for vehicles priced up to USD 35,000 is 70%, while for vehicles above that price range, it is 100%. These duty rates are among the highest in the world.

Interest from Other Car Companies

In response to a question about other car companies' interest in setting up plants in India, Singh confirmed that there are multiple expressions of interest, with at least two companies showing significant interest. However, he did not disclose the names of these companies.

Conclusion

The DPIIT Secretary's clarifications provide a clear understanding of the government's intentions behind the EV policy's import duty concessions. The policy aims to expand the Indian EV market, attract global players, and foster the growth of domestic manufacturers while ensuring a competitive environment. By carefully balancing the interests of all stakeholders, the government seeks to drive the transition to electric vehicles and position India as a major player in the global EV industry.