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The government will formulate rules that will encourage research and development of electric vehicles in India
The government is contemplating a policy to promote electric vehicles in the country, for which an inter-ministerial group is currently conducting a feasibility study.
The policy, which is aimed at providing guidelines on how to promote electric and alternate fuel vehicles in the country, is likely to be finalised by this fiscal.
According to sources close to the development, a core group has been formed with representatives from different ministries, including road transport, petroleum, heavy industries and environment, and the National Manufacturing Competitiveness Council (NMCC).
While the feasibility study has been going on under the NMCC, the final draft as well as implementation of the policy will be carried out by the heavy industries ministry, sources added, reports PTI.
“The main task before the group is to find ways how to encourage research and development of such vehicles in the country. It is studying possible options to incentivise the electric vehicle industry,” a source said.
Promoting formation of joint ventures, especially in the electric vehicle (EV) battery manufacturing, making it easier for technology transfers are also some of the areas that the policy would emphasise, sources added.
The feasibility study is also looking into the infrastructural aspect to support such modes of transportation. It will evaluate how more charging points can be set up across the country.
The core group is also holding discussions with all the States for promoting alternate fuel technologies.
Currently, 4% excise duty is levied on production of EVs, while the components for EVs come under the 10% excise duty net, which the manufacturers are urging the government to waive.
The import of EVs attracts 14% duty and there is a 4% duty for import of parts.
On the sales front, while Delhi, Rajasthan, Uttarakhand and Lakshadweep do not levy any sales tax, other states charge 4%-15% sales tax or value-added tax (VAT).
"The state of affairs in the EV industry is very poor. The industry will not survive very long, unless there is government intervention. We need government support," said Society of Manufacturers of Electric Vehicles (SMEV) president Naveen Munjal.
The industry can create a niche for itself in three-five years, but with government help it can be done much faster, he added.
The size of the EV industry is pegged at about 85,000 units annually.