The exemption, which is being “actively considered” according to sources who spoke to TOI, will be a significant relief for global companies that need to meet domestic value addition conditions to avail the lower duty regime. Will happen.
“The government is considering excluding batteries, semiconductors and magnetic parts from localization conditions when it comes to imports of electrics, and this could be a big benefit for companies like Tesla, which needs its reliable supply in India. It will also take time to get the series. If it goes ahead and sets up a factory here in the coming years,” sources told TOI.
“The cumulative value of the three high-value items will be around 50% of the cost of a car, and any discount here will come as a significant relief,” said a person with knowledge of the matter.
The new idea is not appealing to local players (Mahindra & Mahindra and Tata Motors) as well as foreign companies that have been operating in India for decades (such as Maruti Suzuki, Toyota, Hyundai and Kia). Companies, already protesting against the proposal to reduce import duty for electrics, are now voicing their opposition against any further relaxation in terms of domestic value addition norms. “Local and other India-invested companies feel that despite being the first to invest in electrics, they will suffer huge losses when the government pushes the industry to go green faster and develop new products and supply partners Was.”
Sources said the local automobile group is now aggressively putting forth its views in talks with the government, even as industry body Society of Indian Automobile Manufacturers (SIAM) has prepared a representation on the matter. “Clearly, this is now a situation where local manufacturers (domestic and multi-nationals) are pitted against newcomers like Tesla, fearing that ‘easy, well-equipped entry’ will hurt their electric prospects,” the source said. Can end it.” ,
However, a large influential group of German companies – Mercedes-Benz, Volkswagen Group and BMW – are sitting on the outside and watching developments from the sidelines. “The Germans are not against lower import duties and even easier sourcing norms. However, they want lower investment commitments than newcomers, especially since they have already made some, if not very heavy, investments in India.
On the other hand, companies like Maruti Suzuki and Toyota are cumulatively investing heavily for battery plants in Gujarat, and even the Hyundai-Kia Korean alliance has similar plans. Tata Motors has also committed to manufacturing batteries locally and in June announced plans to invest about Rs 13,000 crore for a lithium-ion cell factory in Gujarat.
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