FM Nirmala Sitharaman says no proposal to lower import duty on electric vehicles
Tesla had earlier sought tax cuts on imports of its cars, a demand which was rejected by the Indian government.
NEW DELHI: Finance Minister Nirmala Sitharaman on Friday denied reports that said the government is planning to reduce import duty on electric vehicles to facilitate Tesla’s entry into India. Speaking on the sidelines of the B20 Summit in New Delhi, Sitharaman said that no such proposal is currently under consideration.
This statement follows a recent media report that the government may implement a policy allowing automakers to import fully-built EVs at a reduced tax rate as low as 15%, down from the current 100% for vehicles priced above $40,000 and 70% for others.
Elon Musk’s Tesla is gearing up to enter the Indian market. After Prime Minister Narendra Modi’s recent visit to the USA, Tesla officials have resumed talks with the Indian government. Tesla had earlier sought tax cuts on imports of its cars, a demand which was rejected by the Indian government.
Meanwhile, the FM said the criticality of managing inflation for economic growth during her address at the CII B20 Summit INDIA 2023. She underlined the need to address supply-side factors in addition to relying solely on interest rates to combat inflation. She warned that persistently high inflation could weaken demand and hinder economic recovery if elevated interest rates are maintained for an extended period.
The latest government data revealed that retail inflation reached a 15-month high of 7.44% in July, primarily driven by rising prices of vegetables, pulses, cereals, and spices.