India EV Policy: Reduced Import Duty on EVs by 15% from 70%

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India has introduced a new EV policy to lure foreign EV manufacturers like Tesla, Vinfast, etc to invest in India. The new EV policy will also promote the widespread adoption of EVs in the country. Under this new EV policy import duty on electric vehicles will be reduced to 15% from 70%. The low import duty on electric vehicles will encourage foreign electric vehicle manufacturers like Tesla, Vinfast, Polestar, etc to invest heavily in India. Under the new EV policy, EV companies need to invest a minimum of ₹ 4,150 crore to avail the benefits of low import duty on electric vehicles.

India EV Policy

India EV Policy: Import Duty on Electric Vehicles is Reduced to 15% from 70%

The government is committed to the widespread adoption of electric vehicles in India. To support this commitment India has introduced a new revived EV policy to attract foreign investment in electric vehicle manufacturing facilities in India. Under the new India’s EV policy, import duty relaxation will be provided to foreign electric vehicle manufacturers. The import duty on electric vehicles is reduced to 15% instead of 70% of the vehicle cost. This will encourage foreign electric vehicle manufacturers like Tesla, Polestar, and Vinfast to start their business operations in India. Indian EV enthusiasts will get more advanced and performance-oriented options of electric vehicles in India at a much more affordable price.

Tesla Vinfast in India

India EV Policy: Terms and Conditions

The Indian Government has set a target under which 30% of the total vehicles sold will be electric vehicles by the year 2030. To support this target India has introduced a New EV policy on 15th March 2024. Under this policy, foreign EV companies need to invest a minimum ₹ 4,150 crore in three years to set up an electric vehicle production facility. It is also mandatory for EV companies to reach 50% domestic value addition by the end of five years. It also includes the local manufacturing operations by the third year.

If electric vehicle manufacturers follow all these conditions then they can import 8000 vehicles annually at the minimum cost of Rs. 29 lakh per vehicle at the reduced 15% import duty. This Indian EV Policy is only applicable to the Completely Knocked Down (CKD) unit of the electric vehicle.

India EV Policy

How India’s New EV Policy Will Impact the Indian Electric Vehicle Sector

This new EV policy will surely lure foreign EV giants to set up their EV manufacturing facilities in India because as per some media reports the market size for electric vehicles is going to reach 110.74 billion USD in the year 2029. The new EV policy will also positively impact the sales of electric vehicles in India. At present India levies around 70% to 100%  tax on imported cars and collaboration between the government and EV manufacturers under this EV policy helps in lowering the cost of electric vehicles and also focuses on building the capacity of local industries to support EV manufacturing and supply chain activities in India

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