Maharashtra tourism and environment minister Aaditya Thackeray on Wednesday wrote a letter to Union Finance Minister Nirmala Sitharaman and made few suggestions to give a boost to the Electric Mobility revolution in India.
Aaditya Thackeray in the letter recommended the Union Finance Minister to lower the import duty on electric vehicles (EV).
In his letter to the Finance Minister, Aaditya Thackeray said: "I want to emphasize that more than 20 per cent of India's greenhouse gas emissions come from the transportation sector. It is also pertinent to observe that in 2017 alone India's death toll linked to air pollution issues was about 23 million people. As a nation, we are also reliant on oil imports. I strongly believe that through consistent & radical reforms in the EV sector, we can address a substantial portion of the said issues our nation currently faces."
The Maharashtra tourism minister suggested Nirmala Sitharaman that the concessionary rate could be for a maximum of 3 years or a defined import limit "for any company wishing to import vehicles for retail sale or import international standard components for making an EV."
"Pioneering companies like Tesla, Rivian, Audi, BMW among many others must be given a time-bound concessionary customs rate for the import of vehicles for retail sale. This will drive the aspiration value in the market, boost investment in our supply chain and encourage the start eco-system to follow the lead of such companies. Similar approach has been taken across emerging markets worldwide," he said.
He further said that the concessionary rate could also be given in return for a fixed investment guarantee in India's auto supply chain or charging infrastructure which could be to the tune of the customs' revenue the government foregoes relative to te current tax regime, which could be assessed annually.
"A mere high import duty only adds to the burden of the customer and does not lay the ground for any industry investment as custom revenues are not directly used for sectoral investments," he said.
"It may also be noted that the current tax regime of importing CKDs, CBUs & SKDs for EVs is not well-aligned with the EV ecosystem. The assembling of EVs & ICE engine cars needs to be differentiated given that every EV has a distinct framework. Therefore, a broad-based standardization in this regard in the customs code may not be feasible, given the early stage manufacturing development of EVs," he added.
Aaditya Thackeray also urged Sitharaman to allow priority sector lending for EVs. "EVs in the Reserve Bank of India's priority sector lending (PSL) guidelines can encourage the financial sector to mobilise necessary capital," he said.
"In addition to enhancing accessibility to jobs and markets, EVs can save gasoline costs for users that can be used towards other avenues such as healthcare, education, food, or housing Therefore, I sincerely request the Ministry of Finance to potentially pursue the said matter with the RBI to make priority sector lending possible for the EVs," he added.
The letter comes just days ahead of the Union Budget. Meanwhile, Several Indian states like Telangana, West Bengal, Maharashtra, Punjab, Karnataka and Tamil Nadu have already invited Musk to set up a plant.
Musk had recently tweeted that the US-based firm is working through a lot of challenges with the government to launch its products in India. "Still working through a lot of challenges with the government," Musk tweeted in reply to a Twitter user, who asked: "Yo @elonmusk any further update as to when Tesla's will launch in India? They're pretty awesome and deserve to be in every corner of the world!"
Last year, Tesla had sought a reduction in import duties on electric vehicles (EVs) in India. The union heavy industries ministry had asked the electric car major to first start manufacturing its iconic electric vehicles in India before any tax concessions can be considered.