For the Longest time ever India has been levying heavy duties on EVs making it almost impossible for Foreign car makers to grow their presence so now finally Indian Government has used their brains in the right direction and have drastically reduced the Import duties on Electric cars but obviously with a huge catch.

Old Indian Government EV Policy - 

The Indian Government’s old EV policy was a lot stricter compared to the new one released recently. A few of its very serious norms were - 

If an International Car brand wants to enter the Indian market, it would need to collaborate with an Indian firm to operate its business. 

If the brand wants to enter India, it should build a manufacturing factory. ( This was specially implemented for all the makers importing their cars from China )

If the brand wants to import its models through CBU or CKD units, it would need to pay a customs duty of 70 - 80 %. 

This made manufacturers like Tesla, etc have second thoughts when it came to their Indian market entrance. Even, as said earlier, Tesla tried to make the officials change the decision and make it favourable for the brands, but Mr. Nitin Gadkari stayed firm on what was decided. 

Our take on the old Indian EV policy - They were good, as they were indirectly targeting the growth of our economy. But, simultaneously, it was also making it tough for brands to enter India to actually help contribute to the economy. 

India's New 2024 EV Policy -

In 2024, the Indian Government has finally released a new set of policies for the EV sector. These are much more favourable for the Auto Industry, as they show a greater scope of growth. This EV policy, ironically, is also called ‘the Tesla Policy’ because sources say, the Indian Government has shaped these policies to make sure Tesla would be able to enter the Indian market with no issue, unlike earlier. 

These policies are also not that different, if, we compare them with the previous ones, it has just gotten more accessible for brands like Tesla and VinFast to enter India. So, let us get to know the new 2024 Indian Government’s EV policy for the Auto Industry 

If an International brand wants to enter the Indian market, it would need to ensure that it will build a full-fledged EV manufacturing facility in a period of 3 years from its day of entering. 

It will also need to make an investment of ₹4150 Cr ($500 Million) in this period of 3 years of establishing an EV factory. 

From the day Govt will approve the particular brand’s entry in India, it will provide a lowered customs duty to the brand so that it can import a limited number of EVs for the period of the next 5 years. 

This lowered customs duty will be at 15 - 20% for all EVs costing ₹30 lacs or above for 5 years from the day of the Government’s approval.

Once the factory is ready, the brand needs to arrange or hire local part dealers for the manufacturing of the car in order to promote and increase domestic business. 

The percentage of parts from local part dealers used in building the EV will be allowed at 20% at the beginning, but further, the brand needs to increase this number to 50%, strictly. 

All these policies, if observed carefully, are pretty Tesla-oriented ones, in fact, not only favourable for Tesla but the upcoming Vietnamese car manufacturer, VinFast, as well. As Tesla’s India-probable car models come in the range of ₹30 lacs, like the Model 3, so this would definitely help Tesla price its EVs at competitive pricing. 

Moreover, luxury car brands like Lotus, the upcoming Land Rover EVs, etc also have a greater chance of increasing their market share by benefiting themselves from these policies. 

How did Indian Car brands react to India's New 2024 EV Policy? 

Brands like Tata Motors and Mahindra are definitely not happy with this decision of the Government, as it makes the way clear for the toughest competitor in the market, Tesla, VinFast, etc. It will clearly increase tough competitors in the Indian market compared to now. 

Well, this even helps us in a way because, if the competition is increased and toughened, then Indian brands will need to upgrade their standards in terms of their quality and overall product. Ultimately, it will give us better EVs from our Indian side as well.