INDIA SAYS NO TO TAX CUTS ON IMPORTED EVS IN BLOW TO TESLA

NEW DELHI: India’s government has no plan to lower import taxes on electric vehicles (EVs), a potential blow to Tesla Inc. that is looking to break into one of the world’s biggest emerging car markets.

“No such proposal is under consideration in ministry of heavy industries,” junior minister Krishan Pal Gurjar told parliament on Monday, referring to the ministry in charge of making policies for the auto industry. He added that the government is, however, taking steps to promote the use of electric cars by lowering domestic taxes and adding charging stations.

The reply to lawmakers may be perceived as part of the tugof-war between Prime Minister Narendra Modi’s administration, which wants to boost local manufacturing, and Tesla, which is urging India to allow it to import cars more cheaply before it commits to setting up factories in the country. Tesla last month wrote to the transport and industry ministries requesting it to cut import duty on electric cars to 40% from the current range of 60%-100%, Bloomberg News had reported.

A Tesla factory to produce cars in India is “quite likely” if the electric automaker can first begin sales with imported vehicles, chief executive officer Elon Musk said in a subsequent tweet. Tesla is seeking to make inroads into Asia’s third-largest economy, where electric vehicles account for less than 1% of new passenger vehicles and two-wheeler sales compared with 5% in China.