(Update: Union Minister Prakash Javadekar on Tuesday denied all claims that stated Toyota Company will stop investing in India. He said Vikram Kirloskar, Vice-Chairman, Toyota Kirloskar Motor has clarified that Toyota will invest more than Rs 2,000 crore in the next 12 months.)
Japanese company Toyota is not looking at expanding further in India due to the country’s high tax regime stated the company’s executive to Bloomberg. Responding to this report, Lok Sabha MP Shashi Tharoor stated this is an outcome of hopeless economic policies of the government. Other Twitter users also slammed Narendra Modi government’s policies.
This revelation comes at a time when India is trying to attract more investors and companies to India as India has witnessed in steady decline in investments and infrastructure-led growth in the country.
The government keeps taxes on cars and motorbikes so high that companies find it hard to build scale, said Shekar Viswanathan, vice-chairman of Toyota’s local unit, Toyota Kirloskar Motor. In India, motor vehicles including cars, two-wheelers, and sports utility vehicles (although not electric vehicles), attract taxes as high as 28 percent. There are additional taxes that can range between 1-22 per cent based on a car’s type, length, or engine size.
The high levies also put owning a car out of reach of many consumers, meaning factories are idled and jobs aren’t created, Viswanathan said. “The message we are getting after we have come here and invested money is that we don’t want you,” Viswanathan said in an interview. In the absence of any reforms, “we won’t exit India, but we won’t scale up.”
Tharoor stated when the vision is short term gains such problems arise, he tweeted.
Tharoor was not the only one to express his view on this report, but there were many other Twitter users sharing their view on the same.
The report also pointed out that GM quit the country in 2017 while Ford is moving most of its assets in India into a joint venture with Mahindra. This was pointed out by Anshuman Tiwari as well.