India's Revolutionary EV Policy: Import Duties Slashed from 110% to 15% as Global Automakers Show Interest

In a landmark move set to transform India's electric vehicle landscape, the government is preparing to introduce a groundbreaking policy that will dramatically reduce import duties on premium EVs. This strategic decision aims to attract major global automakers and accelerate the country's transition to electric mobility.

Revolutionary Import Duty Reduction

The centerpiece of the new policy is a dramatic reduction in import duties for premium electric vehicles. Under the proposed changes, import duties will be slashed from 110% to just 15% for EVs priced above USD 35,000. This substantial reduction represents one of the most significant policy shifts in India's automotive sector in recent years.

Investment and Performance Requirements

To qualify for these reduced import duties, manufacturers must meet several stringent criteria:

• Make a minimum investment of Rs 4,150 crore in India, excluding existing investments and real estate costs
• Achieve a turnover of Rs 2,500 crore by the second year of operations
• Scale up to Rs 5,000 crore by the fourth year
• Reach Rs 7,500 crore by the fifth year

Implementation Timeline and Localization Goals

The policy includes specific timelines and localization requirements:

• A 120-day application window once the policy is officially announced
• Permission to import up to 8,000 premium EVs annually at the reduced duty rate
• Mandatory achievement of 25% local value addition in the first year
• Requirement to reach 50% localization within 5 years
• Establishment of local manufacturing facilities within 3 years of approval

Tesla's Strategic Entry Plans

Tesla, one of the most anticipated beneficiaries of this policy, has already outlined ambitious plans for the Indian market:

• Launch of a new affordable EV model priced between Rs 21-22 lakh by April 2025
• Initial showroom launches in Delhi and Mumbai
• Establishment of import operations near Mumbai
• Market expansion to Bengaluru by Q3 2025

Global Automakers' Interest

The policy has attracted attention from other major automotive players:

• Hyundai and Volkswagen have engaged in preliminary discussions with the government
• Both companies are exploring opportunities to bring their premium EV models to India
• The reduced import duties could lead to a wider range of global EV brands entering the Indian market

Market Impact and Future Outlook

This policy initiative is expected to have far-reaching effects on India's automotive sector:

• Significant reduction in premium EV prices, making them more accessible to Indian consumers
• Acceleration of EV adoption across different market segments
• Development of a robust EV manufacturing ecosystem in India
• Creation of new employment opportunities in the automotive sector

Approval letters for eligible manufacturers are expected to be issued by July or August 2025, potentially leading to a substantial increase in premium EV offerings in the Indian market by late 2025 or early 2026.

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Categories: electric vehicle import duty, India EV policy, Tesla India entry