India to push for new EV policy amid Tesla’s interest to set up business

The Centre is planning to come up with a new and comprehensive electric vehicle policy to attract more foreign EV makers to India. Piyush Goyal, Union Commerce Minister, said that the government is looking for greater investments from the electric vehicle manufacturers around the world to promote local manufacturing as well as boost India's EV industry. The remark comes at a time when Tesla, world's largest electric car manufacturer, plans to enter India with proposals to invest in components as well as a new facility.

In an attempt to grab the sizeable market of India, Tesla is emphasising on the new car, which would be the most affordable from the EV maker. It is expected to cost around $24,000 (roughly converted to ₹20 lakh) less than the Model 3, Tesla's current entry-level model. It would be built in India for the Indian market and export. Recently, a high-level Tesla team came to India to discuss its investment plan with Indian government officials. After that, Tesla CEO Elon Musk met Prime Minister Narendra Modi, during PM's US visit. He too expressed his interest to invest in India, including a new facility.

According to news agency Reuters, India is considering to reduce import duties on foreign electric cars if EV makers commit to investments in the country. This could be part of the Centre's upcoming EV Policy. Piyush Goyal said that the new policy will be formulated after discussion with all stakeholders. He said, “We will come out with a policy. As we get large-scale production, we will start enjoying the fruits of economies of scale of new technologies."

Tesla's interest in India comes after about a year after its CEO had practically called off the plans due to Centre's stand to not reduce import duties unless the EV maker committed to investment or local production. The sharp reversal is significant since Tesla had urged the Centre to consider reducing taxes several times. Tesla's entry in India could open up avenues for other global EV makers to plan investments here.

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