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Niti Aayog VC to Tesla

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Tesla’s request for a tax cut raised objections from automakers in India.

New Delhi: NITI Aayog Vice Chairman Rajiv Kumar has urged US carmaker Tesla to start manufacturing its electric vehicles in India and convert it into a production hub. Mr Kumar also assured that the US carmaker will get the tax benefits it wants from the government.

The VC of NITI Aayog, in a virtual conference of the Public Affairs Forum of India (PAFI) on Thursday, said that Tesla should not just ship assembled products as it will not create jobs in the country.

“Come and manufacture in India, you (Tesla) will get all the tax benefits you want. But don’t send us assembled products because it doesn’t create jobs for us and our need is to increase jobs and create jobs. Taxes Asked about Tesla’s demand for concessions, he replied.

“And if that happens, you are welcome. Indeed, inviting Tesla to make India a production hub. But, the argument that we will create a market in India by exporting finished products… an old one. There is logic and we have moved on from that,” Mr. Kumar said.

The statement comes after news agency Reuters reported that the US-based carmaker has urged the Prime Minister’s Office (PMO) to reduce import taxes on electric vehicles before entering the market.

Tesla’s request for a tax cut drew objections from automakers in India, who have said such a move would hamper investment in domestic manufacturing.

Earlier in October, Union Road Transport and Highways Minister Nitin Gadkari had also said that the Center has asked Tesla several times to make its electric vehicles in the country.

Currently, cars imported as completely built units attract customs duties of up to 60-100 percent on engine size and cost, insurance and freight charges of less than or more than $40,000. depends on.

In a letter to the Roads Ministry, the US carmaker had said the effective import duty of 110 percent on vehicles with customs duties over $40,000 is “prohibitive” for zero-emissions vehicles.

Tesla argued that “there is currently no Indian original equipment manufacturer or OEM in India that produces a car (EV or internal combustion engine) with an ex-factory price of more than $40,000 and the number of cars sold in the country.” Only 1-2 percent of cars are ex-factory. /Customs value exceeds $40,000.”

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