In a bid to woo companies like Tesla to set up a manufacturing plant in India, the government on Friday announced reduced import duty of 15% for electric vehicles (EVs) imported as a completely built unit (CBU), from the present 70% to 100% applicable for vehicles imported in CBU form, provided the EV maker sets up a local commercial manufacturing unit within three years.
The reduced import duty would be offered if the EV manufacturer meets certain pre-conditions, including a minimum investment of ₹4,150 crore (or $500 million), starts a local manufacturing plant within three years and reaches at least 25% domestic value addition in that time. The auto manufacturer will also have to reach 50% domestic value addition within five years, the Ministry of Commerce and Industry said in a release.
The customs duty of 15% on completely built units would be applicable on cars priced at a minimum value of $35,000 (about ₹29 lakh) including cost, insurance and freight charges. The duty relief will be applicable for a total period of five years.
