India will formulate a new policy to attract electric vehicle (EV) manufacturers and encourage greater investment in the sector, the commerce minister said on Wednesday. Piyush Goyal’s comments come as US electric car maker Tesla is still in talks with the Narendra Modi government over the possibility of setting up a factory in India.
Reuters reported last month, citing sources with direct knowledge of the matter, that India was working on an electric vehicle policy that would cut import taxes for automakers committed to some local manufacturing.
When asked about the government’s plans, Goyal said the new policy will be consulted with the industry.
“We will introduce a policy,” he said, adding that the government hoped to attract more investment and increase domestic electric vehicle production soon.
“As we achieve mass production, we will start enjoying the fruits of economies of scale in new technologies,” Goyal said, without disclosing the nature of any possible incentives.
Tesla executives interested in building a factory in India met Goyal in August.
Tesla plans to produce a low-cost electric car for the Indian market and exports priced at $24,000 (nearly Rs 20 lakh), about 25% cheaper than the existing entry-level model.
Goyal said on Tuesday that Tesla plans to purchase parts worth US$1.7 billion (approximately Rs. 1,410 crore) to US$1.9 billion (approximately Rs. 1,575 crore) from India this year, having purchased US$1 billion (approximately Rs. 8,294 crore) of parts last year.
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