Imported cars costing less than $40,000 will be taxed at 70 per cent rather than 60 per cent
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by Brad Anderson
5 hours ago
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by Brad Anderson
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India has hiked taxes on cars and motorcycles imported into the country.
The tax hikes form part of Prime Minister Narendra Modi’s ‘Make In India’ campaign for the 2024 elections and will see imported cars costing less than $40,000 taxed at a rate of 70 per cent, up from the 60 per cent of earlier.
In addition, the import taxes of semi-knocked-down cars that have major parts imported separately before final vehicle assembly is done in India, will grow from 30 per cent to 35 per cent. The tax hikes will come into effect from April 1.
Completely-built electric vehicles imported into India with a value of more than $40,000 will also be taxed at 70 per cent.
The tax hikes have already prompted concern from Lexus and Mercedes-Benz.
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Speaking with Reuters, the president of Lexus India, Naveen Soni, said that the car manufacturer may need to “adjust the prices” of some models.
“We hope to have better clarity once we study the overall impact of the same,” Soni said.
Similarly, the chief executive of Mercedes-Benz India, Santosh Iyer, encouraged the government to reconsider the changes while speaking with the Hindustan Times: “We wish for reconsideration of the current import duties for EVs to boost their demand, resulting in a faster acceleration for achieving the Government’s vision of a sustainable green mobility ecosystem in the country.”
India has some of the highest import taxes on vehicles of any country. The taxes are so high that last year, Tesla chief executive Elon Musk said the electric automaker would not launch in India because it had been unable to convince the Indian government to give it a reprieve from the tariffs.
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