After the Modi-led government announced a new incentive scheme to push investments into electric vehicle manufacturing, German and some other multinational companies expressed their concern that they may not get a “level-playing field” as special import duty rates would be given only to new entrants but may not be extended to existing players, reported Times of India (ToI).

Auto giants such as BMW, the Volkswagen group and Mercedes-Benz are already considering their official position on the matter, with their Indian subsidiaries briefing global headquarters about the new tax regime that has been announced by the Indian govt last week, sources told TOI.

The Indian government has given the green light to a new electric vehicle scheme with tax relief aimed at positioning India as a prime manufacturing hub. This comes at a time when the Asian nation seeks to attract foreign money for local production from the likes of Tesla. India plans to lower import taxes on select EVs for companies committing to investments of over $500 million and establishing manufacturing facilities within three years. This landmark decision not only aims to attract heavyweights like Tesla but also underscores India's stance in attracting foreign investment to drive local production.

Other companies such as Korean Hyundai and Kia, apart from some of the Indian homegrown makers, feel their “early investments in the electric space should be counted” retrospectively. “The companies feel that they should not be ‘penalised’ just because they were the early ones to invest for electric vehicles production and localisation in India in line with govt’s thinking. The companies want govt takes into account funds they have already put in towards green technology in their local set-ups here,” one of the sources said to ToI.

“They don’t want to be ‘left out’ of any incentive scheme just because the govt is now rolling out sops to attract new investors. Their early commitment to India should also be factored in,” reported ToI quoting its sources.