Daijiworld Media Network- New Delhi
New Delhi, Feb 21: In a move that could reshape India’s electric vehicle (EV) market, the Government of India is considering slashing import duties on fully built EVs from 110% to 15%, according to reports. The decision, if implemented, could provide a major boost to premium EV manufacturers like Tesla, which has long been eyeing entry into the Indian market.
According to The Economic Times, the revised EV policy may require a minimum turnover of Rs 2,500 crore by the second year of operations. The proposed framework suggests that import duties on premium EVs priced above $35,000 (approximately Rs 30 lac) could be slashed to 15%, provided manufacturers meet specific investment and production targets.
An official notification is expected in the coming weeks, following which the application window will be opened for automakers.
To benefit from the proposed tariff reduction, EV manufacturers will be required to meet stringent conditions, including:
• A minimum investment of Rs 4,150 cr ($500 million) in India, excluding previous investments and land costs.
• Achieving a turnover of Rs 2,500 cr by the second year, Rs 5,000 cr by the fourth year, and Rs 7,500 cr by the fifth year.
• Establishing a manufacturing facility within three years and meeting domestic value addition targets—starting at 25% and increasing to 50% within five years.
If these conditions are met, automakers will be permitted to import up to 8,000 high-end EVs annually at the reduced tariff. Approval letters could be issued as early as July-August 2025, paving the way for EV imports to commence soon after.
Tesla has long expressed interest in entering the Indian market but has remained hesitant about setting up a local manufacturing facility. To qualify for duty concessions under the new policy, Tesla must commit to establishing a production plant in India within three years.
However, Tesla CEO Elon Musk has not yet confirmed whether the company will comply with this requirement. Adding to the uncertainty, former US President Donald Trump recently criticized Tesla’s potential expansion into India, calling it an “unfair” move that could hurt American interests.
With the EV sector in India poised for a major transformation, industry experts believe that a lower import duty structure could attract global automakers, accelerating the country’s transition towards sustainable mobility. Whether Tesla will finally take the plunge into the Indian market remains to be seen.