Vietnam’s VinFast Seeks India EV Import Duty Cut as Plant Construction Starts
In a significant move to penetrate the Indian electric vehicle (EV) market, Vietnamese automaker VinFast has proposed a temporary reduction in import duties on its cars to the Indian government. This request comes amidst the commencement of VinFast’s manufacturing facility construction in Tamil Nadu, marking a strategic expansion of the company’s production capabilities outside of Vietnam.
During a groundbreaking ceremony in Tamil Nadu’s Thoothukudi district, VinFast’s India CEO, Pham Sanh Chau, revealed the company’s plans to initiate production by mid-next year. The focus will initially be on catering to the domestic market, followed by an expansion into exports. This development comes after VinFast and the Tamil Nadu government announced their collaboration towards an investment potentially reaching $2 billion, with a pledged $500 million investment over the first five years of the project.
Similar to Tesla, VinFast is advocating for a reduction in India’s steep 100% import duty on fully-built EVs—a move that has faced resistance from domestic car manufacturers. The Indian government is reportedly still deliberating on these requests, without any official decision made public as of yet.
Pham Sanh Chau highlighted the company’s proposal for a moderate import duty reduction, suggesting a temporary decrease to 70-80% for a limited number of vehicles over two years. This strategy aims to foster consumer familiarity and acceptance of VinFast products in the Indian market. As discussions with the central government continue, VinFast is proceeding with the construction of its manufacturing unit in Tamil Nadu.
With electric cars constituting only about 2% of India’s total car sales last year, the Indian government has set an ambitious target to increase EV sales to 30% by 2030. To achieve this, efforts are underway to attract global EV manufacturers to the country.
The Tamil Nadu facility is projected to have an annual production capacity of up to 150,000 vehicles, a significant scale-down from VinFast’s primary manufacturing plant in Vietnam, which can produce 250,000 vehicles yearly. Pham Sanh Chau, leveraging his experience as a former Vietnam ambassador to India, mentioned that VinFast is already establishing a dealer network across India with about 55 dealerships. The company is also considering the possibility of introducing its two-wheeler models in India in the future.
As VinFast navigates its entry into the Indian market, the company’s proactive approach and strategic investments signal a strong commitment to establish a foothold in India’s evolving EV landscape. With a startup mentality, VinFast is ready to accelerate its growth and presence in the competitive global electric vehicle market.
