Indian carmaker Mahindra & Mahindra told the government there must be a level playing field between domestic and foreign companies and local manufacturing must be promoted, an executive said as New Delhi seeks to attract automakers such as Tesla.
Mahindra and Tata Motors have privately pressured Indian officials not to reduce 100% import taxes on electric vehicles and to protect domestic companies and their foreign investors as the government reviews Tesla’s plans to enter the market, Reuters reported last month.
Asked about Tesla’s entry and New Delhi’s plan to lower import duties, Mahindra Managing Director Anish Shah said his company had made representations to Indian officials, saying global electric carmakers must be pushed to invest in India.
“It should be a level playing field and it’s important to invest in India,” Shah told Reuters in an interview at the World Economic Forum’s annual meeting, without mentioning Tesla by name.
“Our approach is essentially to create a stronger industry in India rather than the manufacturing being done outside India and India just becoming an importer of the product,” he added.
India sold 4 million cars last year, of which only 82,000 were electric, but sales in this emerging segment grew 115% over the previous year.
Mahindra has raised about $400 million (roughly Rs. 3,325 crore) from Singapore’s Temasek and British International Investment Corp, while private equity firm TPG and Abu Dhabi state-owned holding company ADQ invested $1 billion (roughly Rs. 8,312 crore) in Tata in 2021.
Shah said Mahindra plans to list its electric vehicle unit by 2029 “because we need to be able to achieve significant success in that business.”
“For us, electricity is the future,” he said.
Tesla has proposed setting up a factory in India but also demanded lower import taxes on electric vehicles. According to Reuters, India is formulating a new policy that will reduce import taxes on electric vehicles to as low as 15% for companies committed to local manufacturing.
But this has worried the Indian industry, with news that Tesla’s entry may pose risks to future financing of Indian electric vehicle companies, as they require stable and favorable import tax regimes.
© Thomson Reuters 2024