Indian government levies 15% import duty for EV components

India's EV dream

Electric cars are the talking point all around the world. It is a hot topic for countries trying to ensure a green status. Norway leads the pack with 47% vehicles and it is trying to help other countries do the same. Europe is the most advanced when it comes to electric vehicles but Asia and China is also not far behind. China recently put a cap on its electric vehicle production as there were too many companies producing the same.

India, however, lacks behind because of infrastructure. The companies are trying to bring in electric cars but the heavy duties have hampered them for years. Prime Minister Narendra Modi’s dream of 2030, where more than 7% of cars should be electric is currently on hold. There are electric cars but no charging stations and vice versa. That said, the government has taken a huge step 2 days before the budget. The union budget is going to come in 2 days and the government has levied 10-15 percent import duty on the manufacturing parts of electric vehicles.

The notification was issued by the Central Board of Indirect Taxes and Customs. This has taken effect from 30th of January 2019. That said, there are parts to this as well, 15% duty will be levied on the pre-assembled kit while 10% will be levied on the knocked down kit with required components such as charger, power control unit, energy monitor contractor, brake system, electric compressor, battery pack, motor, and motor controller. The lithium-ion battery for mobiles has seen an increase in the duties by 20%.

The government will also charge 100% duty on petrol and diesel run vehicles while 25% tax will be levied for electric vehicles. All these steps are brilliant for the Indian electric vehicles scene. The government is working hard towards eradicating the problem.

The problem lies with Li-ion batteries as major companies aren’t producing these batteries. Major battery makers in India such as Exide, Amara Raja and many more have taken it in their hands but the fact is that the Li-ion cells which are a major part have to be imported from South Korea and Japan. LG Chem and Panasonic are the companies who help companies like Amara Raja.

The Indian government has promised all the help needed to produce Li-ion batteries locally. It is also ready to provide land for the same. The government has gone out of its way to help the companies, currently, the batteries are assembled in India and that is proving to be costly for the many companies. Manufacturing is also not very cheap but now that government is backing the companies, there are many ways around it.

-Unmesh Phule

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