India's EV ecosystem doesn't need new incentives or subsidies, says Piyush Goyal

Union Minister of Commerce & Industry Piyush Goyal

Commerce minister Piyush Goyal on January 3 said India's electric vehicle (EV) ecosystem does not need new incentives and subsidies, as the space is self-sustaining.

"Today we had an engagement with auto companies, including some startups in the space. Electric mobility is ready and set to fly, they do not need newer incentives or subsidies. The existing subsidies will be there for some more time and will give the appropriate kick start to the EV ecosystem," Goyal told media in New Delhi.

There was an unanimous agreement, given the self-sustaining nature of the EV space, that there is no need for more subsidies in the future. "Everyone was unanimous in the room that once the existing subsidy regime comes to an end, none of them require subsidies to grow any further," he said. "Today with battery costs and with the advantages on cost of ownership and savings in operations and availability of plug-in hybrids and swapping systems. Everybody was unanimous this."

Representatives of heavy industries, power ministry, government think-tank NITI Aayog and the Bureau of Indian Standards (BIS) also participated in the meeting.

In March, India unveiled an EV policy providing import duty concessions to companies that commit to invest at least $500 million, or a little over Rs 4,150 crore, and set up manufacturing units in the country in three years with at least 25 percent of components sourced locally.

Companies which meet these requirements will be allowed to import 8,000 EVs a year at a lower duty of 15 percent on cars costing $35,000 and above. India levies a tax of 70 percent or 100 percent on imported cars, depending on their value.

The revamped EV policy was expected to bolster the chances of Tesla's entry into India, as the Elon Musk-owned firm was seeking tariff cuts to start manufacturing in the country.

Several issues, including infrastructure related to charging and batter swapping, were discussed in January 3 meeting, the minister said. "In the meeting with auto companies, we focussed on safety standards, which is yet to be notified for two wheelers. BIS has already issued a drat guideline on this. We have asked battery swapping companies and auto firms to come back with their comments by Monday so that can be notified too," Goyal said.