Blow for Tesla's India plans as govt rules out import duties cut

The government has told Parliament it has no plans to cut import duties on electric vehicles, dashing carmaker's Tesla's hopes for duty cut for its vehicles.

"No such proposal is under consideration in Ministry of Heavy Industries," Minister of State Krishan Pal Gurjar told Parliament on Monday while replying to a question on cut of import duties for electric vehicles.

However, Gurjar said the government is taking various initiatives to promote the use of electric cars by decreasing domestic taxes and adding charging stations.

Tesla Inc had last month written to ministries in India and Niti Aayog for reduction in import duties on electric vehicles. Such a move would boost demand and generate revenue for the government, the company had said.

The company had sought slashing of taxes on import of fully assembled electric cars to 40 per cent. The current rate of duties is 60 per cent for cars priced below $40,000 and 100 per cent for those above $40,000.

According to Tesla's US website, only one model - the Model 3 Standard Range Plus - is priced below $40,000.

Later, Tesla CEO Elon Musk said on Twitter that if the company was successful with imports of its electric vehicles, it is likely to set up a factory in India. However, at a time when the government is looking to boost domestic production, it is highly unlikely that it will bring down the import duties.

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