By Tarun Mehta
The introduction of several progressive policies and incentives by the Government like the FAME 2 subsidy and offering income tax rebates on the purchase has led to an increase in consumer demand for electric vehicles in India. We are also witnessing the growth of the EV industry in terms of companies launching high-quality and well performing new products in the market.
For manufacturers, one of the key challenges on investments in the sector is the concerns regarding GST inverted duty structure. In order to minimise working capital blockage, the Government should look at extending end use based benefits to the EV industry like lowering GST rates on raw materials, allowing inverted duty refunds for research and development and capital expenditure. Especially for start-ups like ours in their growth phase, offsetting inputs on such major expenses without being GST profitable is a big challenge.
We also see a need for banking institutions to come up with innovative financial products for EV purchases. Further, start-ups in their growth phase suffer from lack of options on debt financing thereby increasing finance cost burden.
From an operational perspective, we are closely following the production-linked incentive (PLI) scheme and we look forward to more progressive schemes designed for OEMs.
(The author Co-Founder and CEO, Ather Energy)