Tesla entry into India just became very easy as new EV Policy reduces import duties from 110% to just 15%.

India’s new EV policy aims to attract global automakers like Tesla by significantly reducing import duties. The policy will lower the current 110% duty to 15% for premium EVs priced above $35,000, provided manufacturers meet specific investment and localization requirements.

Lower import duties to attract investment

The new policy mandates an investment of Rs 4,150 crore from interested carmakers. They will also need to achieve a progressive turnover milestone, requiring:

• Rs 2,500 crore turnover by the second year
• Rs 5,000 crore turnover by the fourth year
• Rs 7,500 crore turnover by the fifth year

Companies will have 120 days to apply, and approved manufacturers can import up to 8,000 EVs annually at the reduced 15% duty. They must also set up local manufacturing within three years and achieve 25% local value addition, which must increase to 50% by the fifth year.

Tesla’s India entry in 2025

Tesla is expected to be one of the key beneficiaries of this policy. Reports suggest the US-based automaker is planning to enter India by April 2025, with an affordable EV priced at Rs 21-22 lakh. Initial showroom locations are expected in Mumbai and Delhi, with sales expanding to Bangalore later in 2025. Tesla is also planning to import a few thousand EVs through a port near Mumbai before starting local production.

Apart from Tesla, Hyundai and Volkswagen have also shown interest in the new policy, although their investment plans remain unclear. Existing premium EV players like BYD could also benefit from the lower import duties, making their offerings more competitive in India.

The Indian government aims to fast-track EV adoption with this policy, paving the way for increased local manufacturing, better pricing for premium EVs, and stronger competition in the Indian EV market. Approval letters are expected to be issued by July-August 2025, setting the stage for the arrival of more global EV brands.

Source – Bloomberg, Economic Times