PLI scheme for auto sector to help attract Tesla to set up manufacturing base in India: Mahendra Nath Pandey

PTIUpdated: Thursday, September 16, 2021, 02:27 PM IST
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The Union Cabinet on September 15 approved a 25,938-crore PLI scheme for the auto sector focused on promoting the manufacturing of advanced automotive technology products like electric and hydrogen-fuel vehicles/ Representational image |

Heavy Industries Minister Mahendra Nath Pandey on Thursday expressed hope that the production linked incentive (PLI) scheme for the auto sector will help to attract US electric car major Tesla to set up a manufacturing base in India.

The Union Cabinet on September 15 approved a 25,938-crore PLI scheme for the auto sector focused on promoting the manufacturing of advanced automotive technology products like electric and hydrogen-fuel vehicles.

The minister said that the scheme would help boost the growth of the auto industry and make it globally competitive.

"Tesla will definitely be attracted to this scheme...I am hopeful," Pandey told PTI when asked whether the scheme will help in attracting the US firm to set up a manufacturing base in India.

The company has sought certain tax concessions, but it should take the first step and then the government would consider their demand, the minister added.

Tesla has demanded a reduction in import duties on electric vehicles (EVs) in India.

In a letter to the road ministry, the US firm had stated that the effective import tariff of 110 per cent on vehicles, with customs value above $40,000 is "prohibitive" to zero-emission vehicles.

It has requested the government to standardise the tariff on electric cars to 40 per cent, irrespective of the customs value, and withdraw the social welfare surcharge of 10 per cent on electric cars.

The minister also said that the PLI scheme would help create additional employment for over 7.6 lakh people.

The PLI scheme for the automotive sector along with the already launched PLI for Advanced Chemistry Cell (Rs 18,100 crore) and Faster Adoption of Manufacturing of Electric Vehicles (FAME) Scheme (Rs 10,000 crore) will give a big boost to the manufacturing of electric vehicles in the country, he added.

"The scheme will give a huge boost to the auto sector and make it globally competitive. We have received huge positive responses from all the industry on the scheme," Pandey said, adding the ministry will soon come out with detailed guidelines about the scheme.

He also said that the scheme will help in making EVs affordable to common people.

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