India could be go-to destination for car testing, govt removes 252% customs duty

Union minister for heavy industries, Mahendra Nath Pandey, said that the central government has scrapped a 252 per cent customs duty on the vehicles that are imported to India for crash testing. The minister believes this move will put the country in the global business of car testing, reports ANI. He further stated that the zero customs duty, as announced by Union Finance Minister Nirmala Sitharaman in her budget speech 2023, will be effective from April 1, 2023.

Earlier, if any foreign car manufacturer wanted to send its vehicle to India for safety testing of international standards, it used to be slapped with a 252 per cent customs duty. However, in the Union Budget 2023, Finance Minister Nirmala Sitharaman scrapped this customs duty to zero, which is claimed to make India compete in car safety testing at international standards, claims the report. "Earlier Custom duty payable of import of vehicles was very high. It was of the order of 252 per cent of declared values of vehicles which includes basic import duty, freight and Insurance charges, which in turn makes the test agencies as Non-competitive for global business and services," Pandey said.

He also said that currently, only five countries around the world have car safety test facilities of international standards. The United Kingdom has two testing facilities. Germany, Japan, China and Taiwan are among the five other countries with car testing facilities. Now India has become the sixth global car testing centre. "After the scrapping of Custom duty, we have a very bright opportunity to make India the hub of global car safety testing. Countries like Korea, Iran, Malaysia and many other companies have shown interest in car testing here," Pandey added.