India will come up with a new policy to attract electric vehicle (EV) manufacturers and encourage greater investment in the sector, the commerce minister said on Wednesday. Piyush Goyal’s comments come as US EV maker Tesla continues talks with Narendra Modi’s administration on the possibility of building a factory in India.
Reuters last month reported that India was working on an EV policy that would cut import taxes for automakers that committed to some local manufacturing, citing sources with direct knowledge of the matter.
Asked about the government’s plans, Goyal said consultation on the new policy will be held with the industry.
“We will come out with a policy,” he said, adding that the government wants to attract more investment and increase domestic EV production as soon as possible.
“As we get large-scale production, we will start enjoying the fruits of economies of scale of new technologies,” Goyal said without disclosing the nature of any possible incentives.
Tesla’s senior executives with an interest in building a factory in India met Goyal in August.
Tesla plans to produce a low-cost EV priced at $24,000 (nearly Rs. 20 lakh) – about 25 percent cheaper than its existing entry-level model – for both the Indian market and export.
Goyal said on Tuesday that Tesla aims to source components worth between $1.7 billion (roughly Rs. 1,410 crore) and $1.9 billion (roughly Rs. 1,575 crore) from India this year, having bought $1 billion (roughly Rs. 8,294 crore) of components last year.
© Thomson Reuters 2023
