SIAM welcomes the Government’s move to encourage electric mobility in the country through providing preferential import duty on CKD and SKD of electric vehicles vis-à-vis conventional vehicles. At the same time, Government’s intention to not allow import of completely built electric vehicles at a concessional rate is also in the right spirit of Make in India. The notification has also removed ambiguity in the definitions of CKD and SKD of electric vehicles for all the vehicle segments. The fully built electric vehicles will still attract 60 per cent / 100 per cent for passenger vehicles, 50 per cent for two-wheelers and 25 per cent for trucks and buses as they are for conventional vehicles as suggested by SIAM.
In line with their submission to Government, certain additional components are added to be imported at concessional rate should trigger assembly operations in the country. This would help in creating supply and demand for electric vehicles. Government should allow these concessions for a few years to allow industry to achieve minimum viable scale. With improved scale of operations, localization of these components would also happen.
Import duty on battery cell has been raised from Nil to 5 per cent. As there is no cell manufacturing in the country presently, the local battery pack with imported cells would become costlier and make introduction of electric vehicles more difficult. However, it is recognized that domestic cell manufacturing would be an important strategic goal for the country, SIAM would recommend that import duty on cell can be reconsidered and kept at Nil duty with an expiry date announced upfront to enable battery and automobile companies plan. SIAM look forward to work with Government on this aspect to have a win-win situation for the country as a whole.
The announcement has been well designed to enable investments, market creation and localization for electric vehicles and their critical components in the country.
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