Not emotional
Context :
Sparks
begin to fly over demand for EV duty cuts / Eco
Times / 28 July 2021
Extract :
Ø Auto Inc seemingly divided over the way ahead
Ø SIAM, TaMo and OLA chief have opposed any policy relief
to imported EVs
Ø Split wide open : No special duty rates for imported
EVs in India
Ø Tesla seeks 40 % import duty on imported electric cars
Ø 60 % -100 % present duty rate depending on the value
of the car
Ø Auto Industry lobby, Tata Motors, Ola against special concessions
Ø Hyundai supports a lower duty for EVs
Ola’s
Aggarwal strongly disagrees with Musk’s call
/ Business Line
/ 28 July 2021
Extract :
Ø “ Let us have confidence in our ability to build indigenously
and also attract global OEMs to build in India, not just import. We won’t be the
first country to do so “, tweeted Aggarwal on Tuesday
Ø Echoing the sentiments of Aggarwal, Suhas Rajkumar,
Founder-CEO of Simple Energy, a Bengaluru-based electric two wheeler
manufacturer, said that “ Build in India “ is the way forward for the EV
industry
Local
Solar Cos jittery as curbs on Chinese Modules end this week / Eco
Times / 28 July 2021
Extract :
Ø Domestic solar
manufacturers are jittery as the import duty protections to prevent dumping of Chinese modules are
expiring by the end of the week, with no replacements in sight yet.
Ø The current safeguard
duty (SGD) of 14.5% on imports is set to expire on July 30. Due to
World Trade Organisation (WTO) rules, an SGD cannot be applied for more than four years; India is currently
in its third year. Even if the SGD is extended for the fourth and final
year, WTO rules also dictate PROGRESSIVE LOWER RATE of
duties, which would result in an SGD of approx. 14 % for the coming months
Ø Meanwhile, the government only plans to levy ( from April
2022 ), a BASIC CUSTOMS
DUTY of ,
# 25 % on Solar Cells, and
# 40 % on Modules
Ø This provides for an EIGHT MONTH “ Duty Holiday “
, that Indian Power Developers are hoping to exploit by stockpiling Solar
Modules for future projects
Import Duty Incidence on fully assembled Solar Panels Vs fully
assembled Electric Cars
|
PERIOD |
FULLY IMPORTED SOLAR PANELS |
FULLY IMPORTED ELECTRIC CARS |
|
|
|
|
|
( A ) Protection
Period |
|
|
|
|
|
|
|
2019 - 2022 |
Safeguard Duty
of 14.5 % |
FAME I (Phase 1) 2015-17 > 60 %-100 % |
|
2023 |
Safeguard Duty
of 14.0 % |
(Phase II) 2017-19 > 60% - 100 % |
|
|
|
|
|
( B ) Free Market Competition Period |
|
|
|
|
|
|
|
July 2023 onwards |
Basic Custom Duty of : |
FAME II |
|
|
Solar Cells
> 25 % |
Phase I ( 2019-
2022 ) > 40%-60% ? |
|
|
Modules > 40 % |
Phase II ( 2022 – 2024 ) > 30%-50% ? |
MY TAKE :
Ø
Elon
Musk has repeatedly said :
“ Starting with import / sale of fully assembled Model 3 , we plan to ,
progressively set
up a full-
Ø
Let
the Central Government tell Elon :
“ Good !
We will let you import and sell, fully assembled Model 3 in
India for ONE YEAR , at 40 %
import duty, provided ,
# You will NOT be allowed to import fully assembled cars beyond FIRST
year
# From Second Year onwards, you will be allowed to import ONLY some
sub-assemblies /
by any Indian Company ), by paying import duties as applicable to those
sub-assembles / components
# You will undertake / commit to a Phased Manufacturing Program , as
envisaged below :
( source : Will
Tesla follow Apple ? ………………. 23 May 2017 )
Extract :
Govt has proposed to Apple , the following Phased
Manufacturing Program ( PMP ) :
2017-18 :
Mechanics , Die-cast parts, Microphone and Receiver
, Key Pad and USB cable
2018-19 :
Populated Printed Circuit Boards, Camera Modules,
and Connectors
2019-20 :
Display Assembly, Touch Panels , Vibrator Motor and
Ringer
Nothing revolutionary here to anyone who applied
for an Industrial Manufacturing License, around 1970 !
At that time, one was required to submit a PMP , along with the IL ( Industrial License ) Application
And , even provide the figures of increasing
“ local content ( by value ) “
in the selling price of the product proposed to be manufactured locally ( indigenization )
And even provide , figures of “ Anticipated Value “ of Import Licenses
required for each phase ! And provide figures for components imported and
products made / sold , each year !
One only hopes that what Govt proposes to Apple is made “ public “ on DIPP web site so that there is ,
· Total
transparency
· No
ambiguity ( no scope for arbitrariness / discretion )
· Absolute clarity
AND IF AN IDENTICAL POLICY FRAME WORK IS PREPARED – AND MADE PUBLIC ON DIPP WEB SITE – IN RESPECT OF ELECTRIC VEHICLES , THERE WOULD BE NO
NEED FOR ELON MUSK TO TWEET (
HIS APPREHENSIONS ) , NOR ANY NEED FOR A TWEETED RESPONSE !
----------------------------------------------------------------------------------------
Dear Elon :
For immediate approval ( in 24 hours ) , pl submit
your PMP as follows :
2017-18 :
Set up factory next to Mundra Port ( Gujarat ) to facilitate world-wide exports
2018-19 :
Source locally, Tyres / Chasis / Body / Electricals
/ Windows / Dashboards ..etc
2019-20 :
Manufacture in your own factory , Li-ion Battery
/ Wall-mounted Powerpack Storages /
Solar Roof Tiles
2020-21 :
Manufacture RFID Sensors - Cameras – GPS locators
2021-22 :
Augmented Reality Devices /Autonomous Navigation Devices ( Radar – Lidar )
Now , it is very possible that neither Shri Gadkariji , nor Shri Goyalji , would be satisfied with
such a slow PMP , spread out over a period of 5 years
They may, well request Elon to cut it down
to 3 years
And , if they do, I get a feeling that Elon would
telescope the entire PMP , in 2 YEARS !
=================================================
Dear Shri Gadkariji,
It is high time my 4 YEAR old
suggestion ( for a STANDARD / MODEL , phased manufacturing
program – PMP – for Foreign Companies wanting to make / sell EVs , to be
framed and uploaded
on Govt website ), is acted upon to put an end to the controversy which has
been unleashed by Tesla’s request for import duty reduction
And, if our local EV manufacturers have fears of Tesla dumping its Model
3 ( due to lowering of import duty from 60 % to 40 % as requested by Tesla ),
just ask them :
“ If Tesla Model 3 ( CIF of $ 39,990 = Approx Rs 30 Lakh ) pays 40 %
duty ( Rs 12 lakh ) , taking the total to Rs 42 lakh ( before GST / Dealer
margin ), how many will it succeed in selling in ONE YEAR ?
Should you not be worried that ,
even with 60 % duty, Chinese companies ( BYD – SAIC etc ), may sell into India , their
fully assembled electric cars for Rs 10 lakh or less ?
As done in case of Solar Panels / Modules imported from China , do you want me to impose a SGD of 14.5 % on imported
Electric Cars ( on top of
existing 60 % ) , in order to protect you ?
Solar panels ( which are far more important to our Renewable Energy
program ) are slated for a BASIC import duty of only 25 % from next year. Why should Electric cars
be treated differently ?
With regards,
Hemen Parekh / hcp@RecruitGuru.com / 28 July 2021