Musk blames higher import duties for EVs launching delay in India

New Delhi: Tesla CEO Elon Musk reasoned high import duty for the delay in launching his electric cars in India. Replying to a question posed by an Indian YouTuber on Twitter, Musk said he found import duties on EVs are much higher in India as comparing other large countries in the world.

"We want to do so, but import duties are the highest in the world by far of any large country!" he wrote. "Moreover, clean energy vehicles are treated the same as diesel or petrol, which does not seem entirely consistent with the climate goals of India," he added.

Last year, a report said that India has taken a slew of measures to promote the use of electric cars in the country. The government slashed Goods and Services Tax (GST) on electric vehicles to five per cent from earlier 12 per cent but to protect domestic automakers, it levies 125 per cent duty on imported vehicles.

"I'm told import duties are extremely high (up to 100 per cent), even for electric cars. This would make our cars unaffordable," Musk earlier said while responding to a tweet from an Indian follower.

Close on the heels of Union Budget providing tax relief for buying electric vehicles, the GST Council in its meeting last year in July cut the tax on electric vehicles (EV) from 12 per cent to 5 per cent, effective August 1, 2019.

The twin rate cuts are set to further boost the EV sector. The Budget, last year, had proposed an Income Tax deduction of Rs 1.5 lakh on the interest paid on the loans taken to purchase electric vehicles.