SIAM welcomes import duty structure on electric vehicles

Society of Indian Automobile Manufacturers (SIAM) welcomes the Government’s move to encourage electric mobility in the country through provision for preferential import duty on CKD and SKD of electric vehicles similar to conventional vehicles. The apex body also appreciated the Government’s intention to not allow import of completely built electric vehicles at a concessional rate.

According to SIAM, 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 percent/100 percent for passenger vehicles, 50 percent for two-wheelers and 25 percent for trucks & buses as they are for conventional vehicles as suggested by SIAM.

In line with SIAM’s submission, the Government has added certain additional components to be imported at a concessional rate. This would trigger assembly operations in the country. This would help in creating supply and demand for electric vehicles. The government should allow these concessions for a few years to allow the industry to achieve minimum viable scale. With the improved scale of operations, localisation of these components would also happen.

Import duty on battery cell has been raised from Nil to 5 percent. As there is no cell manufacturing in the country presently, the local battery pack with imported cells would become costlier and make the introduction of electric vehicles more difficult. However, it is recognised that domestic cell manufacturing would be an important strategic goal for the country. SIAM recommends 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 looks forward to work with Government on this aspect to have a win-win situation for the country as a whole.

SIAM has noted that the announcement has been designed to enable investments, market creation and localisation for electric vehicles and their critical components in the country.