No Problem With Lower Import Duty on Cars, Says RC Bhargava

Amid reports that Tesla is planning to start selling cars in India with the Indian government lowering the import duty, the chairman of Maruti Suzuki, India’s largest passenger carmaker, RC Bhargava, said he sees no issues with that as the domestic industry is competitive enough to hold its ground.

“I have no problem. These [lower import duty] are government decisions…Indians have the skills, they have the capability of hard work, they have the hunger for excellence. With all these things, nobody can stop us getting to be more competitive,” Bhargava told Autocar Professional.

Last year, the government unveiled an EV manufacturing policy that will drastically reduce the import duty on electric cars to 15% from the current 70-100% for five years, provided OEMs invest at least Rs 4,150 crore, or $500 million, to Make in India within three years. However, the policy’s operational guidelines are yet to be finalised amid a lukewarm response from OEMs.

Recent media reports say the government is likely to modify some conditions of the policy for importing electric cars at lower duty in a bid to attract companies like Tesla, which has for long criticized India’s steep import duties. 

Earlier this week, Tesla posted job ads for 13 mid-level roles in India, including some store and customer relationship managers, and the automaker has reportedly selected showroom space in Delhi and Mumbai to start operations by selling imported cars. This follows a meeting between Prime Minister Modi and Tesla founder Elon Musk earlier this month. 

When asked about how the Indian car industry is prepared for competition from companies like Tesla, Bhargava said: “If we can sell cars to Japan, why should not we be open to buying from others? It is a matter of reciprocity. Even if they manufacture elsewhere, they won’t necessarily build a superior car. We have got too much used to protectionism. That’s my belief.” 

Prominent local and global automakers in India have reportedly expressed concerns about the new EV manufacturing policy. Industry insiders said the scheme’s focus on attracting foreign manufacturers like Tesla has alarmed domestic automakers. They fear the policy could destabilize local players who have spent decades building Indian supply chains, only to face new competition benefiting from relaxed tariffs.

Bhargava noted that the country should have a competitive manufacturing landscape in India. “In India, we should have conditions, where we have the ability to manufacture as competitively as anybody else anywhere in the world. I believe that in India if we get the right kind of technologies, we need to do a lot more. We will be more competitive than any country in the world,” he said.

“Indians have the skills, they have the capability of hard work, they have the hunger for excellence. With all these things, nobody can stop us getting to be more competitive.” Bhargava highlighted the competitiveness of India’s automobile industry with the example of Maruti Suzuki’s exports to Japan, especially Jimny where Suzuki Motor Corp had to suspend the bookings due to unexpectedly high demand.

Tesla’s potential entry coincides with major Indian automakers accelerating their electric vehicle plans. Currently, the penetration of electric vehicles in India’s passenger vehicle industry is at around 2.5% and is projected to be 15% by the end of the decade. 

So far, Tata Motors and JSW MG Motor have dominated the mass-market EV segment. However, companies like Maruti Suzuki and Hyundai Motor are poised to start delivering their mass-market electric car models soon, while Tata Motors, Mahindra & Mahindra, and JSW MG Motor will roll out new models.

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