India plans to reduce EV import taxes from 11% to 15%; Tesla, Hyundai, and VW express interest

By July or August 2025, approval letters for qualified manufacturers may be sent out, opening the door for a rush of high-end EVs to enter the Indian market.
According to reports, the Indian government is preparing to implement a revolutionary Electric Vehicle (EV) strategy that would lower import duties and draw in international automakers like Tesla. This important step has the potential to completely transform India's EV market by lowering the cost of luxury EVs for Indian buyers.

Massive import duty cut to attract global giants Under the new policy, the import duty on premium EVs (priced above USD 35,000) will be reduced from the current 110 per cent to just 15 per cent. This dramatic tax cut is aimed at luring international EV makers and encouraging them to invest in India’s growing EV market. Investment and turnover requirements for manufacturers To qualify for the reduced import duties, global EV manufacturers will need to meet the following conditions:

A minimum investment of Rs 4,150 crore (excluding past investments and land or building costs). Establish assembly units, potentially within existing facilities. Reach a turnover of Rs 2,500 crore by the second year. The policy also outlines future targets: Rs 5,000 crore by the fourth year Rs 7,500 crore by the fifth year Application window and local manufacturing targets Companies will have 120 days to apply for the scheme once it is officially announced. Those approved will be allowed to import up to 8,000 premium EVs annually at the reduced import duty rate. Additionally, approved manufacturers must: Achieve 25 per cent local value addition within the first year, increasing to 50 per cent within 5 years.

After approved, establish local manufacturing facilities within three years.
The ambitious plans of Tesla for the Indian market
Furthermore, according to industry insiders, Tesla will stand to gain a great deal from this new EV policy.

The company is reportedly planning to:

Launch a budget-friendly EV in India by April 2025, priced between Rs 21–22 lakh.
Open its first showrooms in Delhi and Mumbai.
Begin importing vehicles to a port near Mumbai in the coming months.
Expand sales to Bengaluru, Delhi, and Mumbai by the third quarter of 2025.
Hyundai and Volkswagen also eye opportunities
During talks with the government, several significant automakers have expressed interest in joining the program, including Hyundai and Volkswagen. While their investment intentions are yet to be confirmed, both businesses are allegedly examining the prospect of delivering premium EVs to India.

Boosting domestic manufacturing and EV affordability The government’s policy is expected to: Accelerate EV adoption in India. Encourage domestic production of electric vehicles and components. Make luxury EVs more affordable for Indian buyers.