India proposes tax benefits for electric vehicles to promote sales

India wants electric vehicles to account for 30% of all passenger vehicle sales in India by 2030. (File/AFP)
Updated 09 July 2019

India proposes tax benefits for electric vehicles to promote sales

  • Electric cars account for less than 1% of new vehicle sales due to a lack of charging infrastructure and the high cost of batteries
  • India, the world’s third-biggest emitter of greenhouse gases, is home to 14 of the world’s most polluted cities

MUMBAI/NEW DELHI: India proposed tax waivers on Friday on the purchase of electric vehicles and removed import taxes on some auto components to help boost sales and reduce its dependence on fossil fuels.
India, the world’s third-biggest emitter of greenhouse gases, is home to 14 of the world’s most polluted cities, including the capital New Delhi, with its toxic air claiming more than one million lives in 2017.
Finance Minister Nirmala Sitharaman, presenting the federal budget to parliament, said buyers of electric vehicles will receive an income tax deduction of 150,000 rupees ($2,189.30) on interest paid on loans taken out to them.
She added that the government will also withdraw import tariffs on some parts used to make electric vehicles.
“Considering our large consumer base, we aim to leapfrog and envision India as a global hub of manufacturing of electric vehicles,” she said in the budget speech.
While India wants electric vehicles to account for 30% of all passenger vehicle sales in India by 2030, electric cars account for less than 1% of new vehicle sales due to a lack of charging infrastructure and the high cost of batteries.
Sitharaman said the government has already proposed reducing a national goods and services tax (GST) from 12% to 5% to encourage sales. The plan is to have “mega-manufacturing plants” to make lithium storage batteries and solar electric charging infrastructure.
“The government clearly wants to create an entire ecosystem for e-mobility in the country,” said Puneet Gupta, associate director at IHS Markit.
As part of its program to cut pollution in its bustling cities, the Finance Minister also announced that it would shut down old and inefficient power plants and look for ways to increase the use of natural gas-based power.


Oil slumps more than 4% on coronavirus fears

Updated 28 February 2020

Oil slumps more than 4% on coronavirus fears

  • Traders fret about impact of spreading virus on crude demand, particularly from China

LONDON: World oil prices tumbled by more than 4 percent on Thursday, as traders fretted about the impact of spreading coronavirus on crude demand, particularly from key consumer China.

Brent oil for April delivery tanked almost 4.2 percent to $51.20 per barrel, while New York’s WTI crude for the same month dived nearly 5 percent to $46.31.

“Concerns that the virus will prompt a global slowdown, weaker consumer confidence and reduced travel has raised concerns about lower demand, weighing on prices,” said CMC Markets analyst Michael Hewson.

Investors are growing increasingly fearful about the economic impact of the new coronavirus or COVID-19 outbreak. 

The virus continues to spread meanwhile, with Brazil reporting Latin America’s first case, and Denmark, Estonia, Greece, Georgia, Norway and Pakistan following suit.

Around 2,800 people have died in China and more than 80,000 have been infected. There have been more than 50 deaths and 3,600 cases in dozens of other countries, raising fears of a pandemic.

The spread of the virus to large economies including South Korea, Japan and Italy has raised concerns that growth in fuel demand will be limited. 

Consultants Facts Global Energy forecast oil demand would grow by 60,000 barrels per day in 2020, a level it called “practically zero,” due to the outbreak.

US President Donald Trump sought to assure Americans on Wednesday evening that the risk from coronavirus remained “very low,” but global equities resumed their plunge, wiping out more than $3 trillion in value this week alone.

“The negative price impact would intensify if the coronavirus were declared pandemic by the World Health Organization, something that looks imminent,” said PVM Oil Associates analyst Tamas Varga.

“The mood is gloomy and the end of the tunnel is not in sight – there is no light ahead just darkness. Not even a refreshingly positive weekly US oil report was able to lend price support.”

Gasoline stockpiles dropped by 2.7 million barrels in the week to Feb. 21 to 256.4 million, the Energy Information Administration (EIA) said on Wednesday, amid a decline in refinery throughput. Distillate inventories fell by 2.1 million barrels to 138.5 million.

US crude oil stockpiles increased by 452,000 barrels to 443.3 million barrels, the EIA said, which was less than the 2-million-barrel rise analysts had expected.

The crude market is watching for possible deeper output cuts by the Organization of the Petroleum Exporting Countries and its allies including Russia, a group known as OPEC+.

“Oil is in freefall as the magnitude of global quarantine efforts will provide severe demand destruction for the next couple of quarters,” said Edward Moya, senior market analyst at OANDA. 

“Expectations are growing for OPEC+ to deliver deeper production cuts next week.”

OPEC+ plans to meet in Vienna on March 5-6.