Following calls from electric car makers like Tesla, the state of Maharashtra on Wednesday urged the federal government to reduce tax rates on imported cars in the February 1 budget.
see photosCurrently, India levies up to 100% import duty on high-end cars including EVs
India’s western Maharashtra state on Wednesday urged the federal government to reduce tax rates on imported cars in the budget on February 1, following calls by electric carmakers such as Tesla. Maharashtra is a major auto manufacturing hub for domestic carmakers such as Tata Motors and Mahindra & Mahindra, both of which are investing in manufacturing electric cars locally and have resisted pressure from Tesla to reduce taxes.
The state environment minister, in his letter to Prime Minister Narendra Modi’s finance minister Nirmala Sitharaman, said reducing taxes for a limited time would boost India’s supply chain ecosystem and the process of manufacturing electric vehicles (EVs).
Tesla, which wants to start selling cars in India, is lobbying to reduce the rate by 40 percent
Aaditya Uddhav Thackeray said in the letter issued by him on Twitter, “Tesla, Rivian, Audi, BMW among many others should be given a time bound concessional customs duty rate for import of vehicles.”
Thackeray in his letter called for reducing the tax rate for a specified number of vehicles for a maximum period of three years or for any company wishing to import EVs or auto components for manufacturing such cars in India. also recommended.
Currently, India imposes an import duty of up to 100% on high-end cars, including EVs, to protect and promote the local industry. Tesla, which wants to start selling cars in India, is lobbying to reduce the rate to 40 percent.
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Maharashtra’s plea to the Modi government comes after a tweet by Tesla CEO Elon Musk last week in which he said that the company “still faces a lot of challenges with the government” ahead of a possible launch in India.
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