Expecting response from many EV companies and not just one: DPIIT Secretary

The Indian government stated on Saturday that it anticipates a positive reaction from several automakers to its electric-vehicle (EV) policy, which was unveiled in March in an effort to draw in major international players like Tesla.

Rajesh Kumar Singh, secretary of the Department for Promotion of Industry and Internal Trade (DPIIT), stated that the government has utilised tariff adjustments in the strategy without really investing any money to ask firms to commit to establishing a base in India.

While addressing the CII's annual business summit, Singh while not mentioning Tesla directly, said that they are expecting responses from many companies on their new policy and not just from any one company.

The government's March 15 electric vehicle policy aims to attract major foreign companies like Tesla by lowering tariffs for companies who set up production facilities in the country with a $5,000,000.0 minimum investment.

The policy stipulates that an enterprise has three years to establish production plants in India, begin producing e-vehicles for sale, and achieve fifty per cent domestic value addition (DVA) in a maximum of five years.

A restricted quantity of automobiles at a reduced customs/import charge of 15% on vehicles costing USD 35,000 and higher will be imported by the firms that establish manufacturing facilities for electric vehicle passenger cars. This approval will be valid for five years from the day the government issues the letter of approval.

Currently, the customs charge on automobiles imported as completely built units (CBUs) ranges from 70 to 100 per cent, based on the engine size and cost, insurance and freight (CIF) value of USD 40,000 or more.

The goal of the policy is to draw in investment from reputable international EV manufacturers and market India as a location for EV manufacturing. Subject to certain requirements, the firm will be able to import CBUs of e-4W that they manufacture at a discounted customs charge of 15% under the plan.

Singh said that they have secured pledges for investments in the Indian tyre industry from two significant international corporations.

"Imports of certain goods that were put on a limited import list were requested by two major multinational firms, who came to us with their requests. We told them that although we will allow imports, we would rather see these product lines made in India. After they gave us those guarantees, we allowed such indulgences." Singh said.

To promote local production, India has placed particular tyre types on the licencing list and enforced rigorous quality control standards for them.

Further citing Singh Zee News reported, "There are other ways to ensure that the kind of goals that we have under the PLI (production linked incentive) scheme for investments can be met even by prudent use of tariff-and non-tariff policies".

The secretary discussed India's involvement in the March signing of the four-nation European bloc EFTA (European Free Trade Association) free trade deal, stating that it is the first of its type to include investment pledges.

He noted that the authorities are monitoring those plans and assured the audience that there are provisions to reclaim market access in case of obligation failure.

India and the European Free Trade Association (EFTA) inked a free trade agreement (FTA) on March 10th, under which New Delhi was promised an investment of USD 100 billion over the course of 15 years by the organisation. In exchange, many items, including chocolates, Swiss watches, and cut and polished diamonds, were allowed lower or no duty rates.