India’s fledgling electric vehicle (EV) industry is likely to receive a shot in the arm with the slashing of corporate tax on new manufacturing companies.
With most makers of electric vehicles and their components planning their investments for India, they would be encouraged to accelerate their plans for local manufacturing with the announcements made by finance minister Nirmala Sitharaman. The steps are expected to propel domestic production, specifically in producing lithium-ion batteries, charging equipment, electrical and electronic parts. Producers of hybrids and even conventional internal combustion vehicles will also benefit.
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“With falling rupee, imports have become expensive. Logically, the manufacturing companies will look at increasing localization of components in India under the newly announced tax regime for new units. This will boost overall manufacturing activities,” said Vinnie Mehta, director general of Automotive Component Manufacturers Association of India (Acma).
The auto industry, along with its vast auto ancillary supply chain, accounts for 49% of India’s manufacturing GDP.
Source: livemint
