After Tesla, Mercedes Benz asks India to reduce import duties

Tesla, Mercedes Benz India

In July, Tesla chief Elon Musk took to Twitter raising concerns over high import rates that are pushing back entry of the e-vehicle maker in the country.

Luxury carmaker Mercedes Benz joined Tesla in voicing concerns over high import duties. It has warned that the customers in India will get “penalised by buying the cars at double to what buyers in the US and other western markets pay”.

Calling the import duty “outrageous” Martin Schwenk, the MD of Mercedes-Benz in India, told The The Times of India (TOI) that the import duties are extremely high and should be reduced to scale up market for new cars with global technologies.

“Currently it is not possible to localise all new technologies, including electrics, in India due to the low levels of sales volumes we have here. We can’t get customers at these duty levels,” he said.

Currently, India levies import duty of 100% on wholly imported cars with CIF value (cost, insurance and freight) more than $40,000 and 60 percent on others with CIF less than that.

In July, Tesla chief Elon Musk took to Twitter raising concerns over high import rates that are pushing back entry of the e-vehicle maker in the country.

Responding to Youtuber Madan Gowri’s tweet “please launch Tesla cars in India ASAP!” Musk responded with: “Want to launch Tesla in India, but import duties are the highest in the world by far of any large country. Moreover, clean energy vehicles are treated the same as diesel or petrol, which does not seem entirely consistent with the climate goals of India.”

Schwenk said that he supported the demand.

“My only submission is that duties should be reduced for all kinds of high technology luxury products, and not just for electrics,” he told the publication.

Tesla, in its pitch to the government – first reported by Reuters in July, argued that lowering import duties on EVs to 40 percent would make them more affordable and boost sales. This triggered a rare public debate among automakers over whether such a move would contradict India’s push to increase domestic manufacturing.

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