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What challenges do gig workers face?
What challenges do gig workers face? Gig workers face several challenges, primarily revolving around the nature of temporary, project-based...
What challenges do gig workers face? Gig workers face several challenges, primarily revolving around the nature of temporary, project-based...
What does the policy propose?
ReplyDeleteAt the centre of the notified policy is the provision to reduce customs duty on the import of ready-to-ship completely assembled electric four-wheelers from the present 70-100% to 15%. This would apply to all vehicles valued at $35,000 for a period of five years. However, this would be subject to the manufacturer investing a minimum of ₹4,150 crore over the next three years. They would also be expected to build infrastructure and facilities as to enable 25% of the overall manufacturing activity to be undertaken domestically within three years, and 50% within five years. The MHI specifies that a maximum of 8,000 vehicles can be imported at the reduced duty rate in a year. The maximum duty permitted to be foregone under the scheme has been capped at ₹6,484 crore.
Does this help our overall ecosystem?
ReplyDeleteShouvik Chakraborty, Assistant Research Professor at the Political Economy Research Institute at the University of Massachusetts Amherst, argues that a domestic industrial policy aligned with a vision for the future could be a step in the right direction. However, he holds that the current policy would bode well for India only if there is a sharing of technology with domestic auto-makers. Further, he observes, “Countries these days are extremely cautious about transferring technology outside. In that light, India must not become a domestic hub for producing components of a vehicle.” Dinesh Abrol, adjunct faculty at the Transdisciplinary Research Cluster on Sustainable Studies at JNU in Delhi, observes that no foreign firm has ever helped build some other country’s ecosystem. He attributed China and South Korea’s ability to build manufacturing setups to their focus on skilling, research and development alongside undertaking innovation projects. “This enabled conditions for a technology transfer and prompting companies to come and invest into the ecosystem,” he states. China as the leading manufacturer of EVs accounted for 70% of the global manufacturing in 2024. The other set of concerns relate to the potentially increased focus on four-wheeler EVs. According to data compiled by FADA, EVs accounted for 7.8% of all vehicles sold in FY 2025. This was predominantly led by electric three-wheelers (at 57% in its category), followed by two-wheelers (6.1%), passenger vehicles (2.6%) and commercial vehicles (0.9%). Also imperative to note that the International Energy Association (IEA) attributed India as the world’s largest market for electric three-wheelers in 2024. Mr. Chakraborty further emphasises that majority of India is travelling by public transport, and policies must also endow their focus towards building the same.
What about our industrial ambitions?
ReplyDeleteReuters had reported in December 2023 that Tata Motors opposed Tesla’s proposal to lower import duties. It had argued that lowering duties would “vitiate” the investment climate which was premised around expectations of the tax regime favouring locals. The auto-maker further held that India’s EV players required more government support in the early growth stages of the industry. According to IEA’s EV Outlook, domestic Original Equipment Manufacturers (Tata and Mahindra) accounted for more than 80% of the electric cars produced domestically in 2024. Additionally, it attributed a less than 15% share of Chinese imports in the country’s EV sales in 2024 to high import duties on EVs and the availability of locally made, affordable electric models. Thus, the lowering of duties prompt concerns about the impact on domestic industries. According to Mr. Abrol, the policy is premised around foreign-capital. He suggested the policy should instead be oriented towards local ecosystems.
At the centre of the notified policy is the provision to reduce customs duty on the import of ready-to-ship completely assembled electric four-wheelers from the present 70-100% to 15%.
ReplyDeleteAccording to data compiled by FADA, EVs accounted for 7.8% of all vehicles sold in FY 2025.
According to IEA’s EV Outlook, domestic Original Equipment Manufacturers (Tata and Mahindra) accounted for more than 80% of the electric cars produced domestically in 2024.