[Source/Observer Network, Pan Yuchen, Edited by Gao Shen] According to a report by Reuters on April 2nd, in order to reach a trade agreement with the United States, India plans to reduce tariffs on imported American electric vehicles and has refused local automakers' lobbying to delay this tax cut.
Two industry sources and a government official said that electric vehicles will be among the first一批 of tariff reductions in the bilateral trade agreement between India and the US. In order to avoid offending US President Trump and his ally Tesla, New Delhi is taking the reduction of electric vehicle tariffs seriously.
Tesla / Reuters
Meanwhile, Indian automakers are lobbying the Modi government to postpone any reduction in electric vehicle tariffs until 2029, gradually reducing them from around 100% to 30%.
"We have protected the auto industry for too long. We must open it up," a government official said. He added that the Indian government's plan is to "significantly" reduce tariffs, including those on electric vehicles. However, given ongoing negotiations with Washington, officials declined to disclose the scale of planned tax cuts.
This news has not yet been commented on by the Indian Ministry of Commerce and the Society of Indian Automobile Manufacturers.
India is the world's third-largest car market, with total sales reaching 4.3 million units in 2024. However, in 2024, electric vehicles accounted for only 2.5% of total sales, led by Tata Motors. The Indian government aims to increase this proportion to 30% by 2030.
If India reduces tariffs on electric vehicles, Tesla will benefit. The company plans to start selling imported cars in India this year and has already secured showrooms in Mumbai and New Delhi. Trump once stated that India is the "king of tariffs," and Tesla cannot sell in India in its current state because it is "unfair."
However, this will be a setback for Indian companies like Tata Motors and Mahindra. These automakers have made significant investments in domestic electric vehicle manufacturing and are strongly lobbying against tax cuts.
Three sources said that local automakers are concerned that any agreement reached with the US will set a precedent for ongoing trade negotiations with the EU and the UK, intensifying competition in India's electric vehicle industry.
The sources added that local automakers are open to tax cuts for internal combustion engine vehicles but emphasized that their investment in electric vehicles is linked to India's incentive programs for domestic manufacturing, which will continue until 2029. Reducing electric vehicle tariffs before then would harm the competitiveness of domestic automakers.
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Original source: https://www.toutiao.com/article/7488968695948853800/
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