Indian automaker Mahindra & Mahindra urges the government to ensure competition stays fair when attracting foreign EV companies like Tesla. They want policies that encourage local manufacturing and prevent India from simply becoming an importer, Reuters reported.
During the World Economic Forum annual meeting, Anish Shah, the Managing Director of Mahindra, emphasized in an exclusive interview the significance of fostering domestic manufacturing and building a strong industry in India.
Mahindra and Tata Motors have quietly pleaded with Indian authorities not to lower the current import duty of 100% on electric cars.
According to a Reuters story from last month, this action is meant to safeguard indigenous companies and their foreign investors while the government assesses Tesla’s intentions to join the Indian market.
In response, Anish Shah said, “It should be a level playing field, and investing in India is important.” He emphasized the necessity for foreign EV manufacturers to invest in India in order to support the local industry, without specifically naming Tesla.
Shah outlined the company’s strategy, which is centered on averting a situation in which manufacturing is outsourced and India is reduced to becoming a goods importer.
Just 82,000 of the 4 million cars sold in India’s automotive industry last year were electric. Notwithstanding its tiny market share, the electric vehicle (EV) segment saw notable expansion, with sales rising by 115% over the prior year.
Mahindra has gotten about $400 million in finance from British International Investment and Temasek in Singapore to help grow the EV industry.
Speaking on Mahindra’s intentions to list its electric vehicle division, Shah said, “Our company firmly believes that the future is electric, and we’re determined to be a major player in that market.” However, he also hinted that this move would not take place before 2029.
Unlike Mahindra, Tesla has asked for lower import taxes on electric vehicles and has suggested setting up a manufacturing plant in India.
According to media sources, India is developing a new policy that may lower import duties on electric vehicles to as little as 15%, provided businesses agree to engage in some degree of local production.
However, there are worries in the Indian market, as some sources suggest that Tesla’s arrival may make it more difficult for Indian EV startups to raise capital in the future.
The expansion and sustainability of the domestic EV industry are considered to be contingent upon a stable and advantageous import tax structure.
The government’s choice in this issue would surely have a significant impact on how the Indian market for electric vehicles develops in the future.