Govt not to impose import duty on cars brought in for testing: Minister

Cut in import duty from 252% to zero will put India in global business of car testing, says Mahendra Nath Pandey, minister of heavy industries

The Centre has decided to remove 252 per cent import duty on vehicles brought in for testing in India by international automakers, in a push to encourage global automotive players to test their vehicles in India. 

Mahendra Nath Pandey, minister of heavy industries said no custom duty will put India in the global business of car testing. The move will attract automakers from more countries to avail of the testing facilities available in the country. Zero custom duty will be effective from April 1, 2023. 

“Earlier Custom duty payable for import of vehicles was very high, which in turn makes the test agencies as non-competitive for global business and services but with zero custom duty India will become a global testing hub," Pandey said while Pandey while inaugurated– “Towards Panchamrit” - Conference & Exposition on MHI schemes for promotion and development of automotive industry in the country, at International Centre for Automotive Technology (ICAT), Manesar, Haryana.

The government has four vehicle testing centres--iCAT (Manesar), ARAI (Pune), GARC (Global Automotive Research Center, Oragadam) and National Automotive Test Tracks (NATRAX, Pithampur). 

The revision in the customs duty for vehicles brought in for testing to India was made in the Finance Bill that was presented on February 1. 

A car crash test demonstration was also done in the presence of the Minister. A car at a speed of 56 km per hour was crash tested successfully at the ICAT center.

After the crash test, Pandey said that currently, they mostly test their vehicles in the UK, Japan, Korea, China and Taiwan. 

The exemption of import duty will enable carmakers to introduce advanced technologies in the country at reduced costs and also support the development of India as an attractive destination for testing and certification of vehicles for other markets.

ICAT has also increased its testing targets for the FY23 to 90 as against 56 done in the FY22. At present ICAT has key facilities such as vehicle crash test system, sled test system, pedestrian protection system, airbag deployment system, and misuse-abuse test tracks. The agency has conducted more than 325 crash tests in the last 6 years.