Finance Minister Piyush Goyal on Friday said India would lead the world in transportation sector, with electric vehicles (EVs) and energy storage devices set to play a leading role in the segment.
Presenting the Interim Budget for 2019-20 in the Lok Sabha, Goyal also said the usage of such green technologies would help the country become self reliant in terms of energy requirements.
"India will lead the world in transport revolution through electric vehicles and energy storage devices bringing down import dependence and ensuring energy security for our country," Goyal said.
When the country will not have to import fuel and gas from abroad, there will be rapid growth in sources of renewable energy, he added.
"When people will start using electric vehicles, I am sure it will save foreign currency and nation would become self reliant," the minister said.
Electric vehicle sales in India are expected to be 30 per cent of total sales by 2030. According to Niti Aayog estimates, EV sales are expected to touch around 25.36 million units in India in 2030.
However, around 59.17 million units will continue to be powered by internal combustion engines (ICEs).
Goyal said – “This India will drive on electric vehicles. We would not have to import oil and will produce electricity on our own domestically”. He also said India is fast becoming the automobile manufacturing hub of the world. However, no tax structures of rebate slabs were discussed during the budget.
“The PM’s and FM’s mission of bringing an electric vehicle revolution to India by 2030 is a truly path-breaking move and will surely provide much needed impetus to the industry,” Society of Manufacturers of Electric Vehicles (SMEV) said in its statement, adding that the industry would welcome the government’s commitment towards making the country pollution free.
India has set a target to increase the penetration of electric vehicles from the current one percent to at least 40 percent by 2030; specifically under the new models segment being sold after 2030.
In 2017-18, 56,000 units of electric vehicles were sold which is expected to double in a year. Against three million fuel-based cars in India, in 2016-17, there were merely 2,000 electric cars.
Sector players were anticipating specific policy measures from the budget, including the roll out of the second phase of Faster Adoption and Manufacturing of Electric (& hybrid) vehicles scheme (FAME).
The scheme provides subsidy to electric vehicle manufacturers in the range of Rs 22,000 to Rs 1,60,000. While the first phase of the scheme was launched (2015) for a period of two years, it has been extended thrice to be continued till March 2019.
A day ahead of the budget 2019, the government lowered customs duty on import of parts and components of such vehicles to 10 to 15 per cent to promote domestic assembling of electric vehicles.
Until now, vehicle parts and components imported for assembly in India attracted import duty of 15 to 30 per cent. The Central Board of Indirect Taxes and Customs (CBIC) has carved out a separate category for parts and components of electric vehicle for which customs duty has been lowered to 10-15 per cent.
Further, the CBIC has removed customs duty exemption to battery packs for electric vehicles and also doubled the duty on battery packs for mobile phones. Henceforth, import of battery packs for electric vehicles will attract 5 per cent tax. Customs duty on battery packs for mobile phone has been doubled to 20 per cent.