Tesla, Tariffs and the EV Import Policy

How India's high import duties kept foreign EV makers out, how the 2024 scheme offered lower duties in exchange for local investment, and Tesla's entry.

India has long charged high import duties on cars, 70 to 110 percent for fully built imports.

The dilemma

High duties protect domestic makers and encourage local manufacturing.
But they keep out foreign EV makers and new technology.

The 2024 scheme

In March 2024, India announced a Scheme to Promote Manufacturing of Electric Passenger Cars:

Companies investing at least 4,150 crore rupees (about 500 million dollars) in India can import a limited number of EVs at a lower 15 percent duty.
They must reach domestic value addition targets within set years.

Tesla

Tesla opened its first showrooms in Mumbai and Delhi in 2025, importing cars at existing high duties rather than committing to a factory initially.

BYD and China

China’s BYD sells EVs in India, but Indian restrictions on Chinese investment after 2020 limited its expansion plans.

Trade-offs

Lower duties can bring competition and technology; conditions aim to secure local investment and jobs.

The investment bargain

A foreign carmaker agrees to build a factory in India. In return, it can import a limited number of EVs at 15 percent duty while the plant is built.

Thinking low tariffs always attract factories

India pairs lower duties with investment conditions.

Key takeaways

India charges 70 to 110 percent duty on imported cars.
The 2024 scheme cut duty to 15 percent for investors meeting conditions.
Tesla opened showrooms in 2025.
Restrictions limit Chinese EV makers' investment.