News By/Courtesy: Nandakishore A | 15 Sep 2020 9:30am IST

HIGHLIGHTS

  • Due to the high tax regime that India has imposed during this pandemic, the Automobile manufacturer, Toyota Motor Corp. states that they won’t be expanding their business any further in India.
  • India is the fourth-biggest car market in the world but global leaders in their respective industries are finding it difficult to survive in an industry that is dominated by cheaper vehicles.
  • India is planning to offer incentives worth nearly $23 billion in the hopes of attracting firms to set up manufacturing and scaling their businesses.

Due to the high tax regime that India has imposed during this pandemic, the Automobile manufacturer, Toyota Motor Corp. states that they won’t be expanding their business any further in India. This is a major blow for our Prime Minister Narendra Modi who is trying to offset the damage in India’s economy caused by the coronavirus, by luring in global companies. The taxes which are imposed on cars and motorbikes are stratospheric as a result of which companies find it hard to scale their businesses. An indirect consequence of this is that the high levies put owning a car out of reach of many individuals who can’t afford to pay such exorbitant prices, this leads to the factories being idled and jobs not being created.

India is the fourth-biggest car market in the world but global leaders in their respective industries are finding it difficult to survive in an industry that is dominated by cheaper vehicles. Shekar Viswanathan, vice-chairman of Toyota’s local unit says that the message they are getting after they have invested their money in India is that “we don’t want you”. He further states that in the absence of reforms to fix this major issue for not only Toyota, but for all investment companies in India, they won't leave India, but they will stop scaling in India. Toyota began its operation in India as early as 1997 and is now one of the world’s biggest carmakers. In India, cars, two-wheelers, and other sports utility vehicles attract taxes as high as 28%. Additional levies which could be anywhere from 1% to 22% could also be imposed upon it based on the type of car. Such exuberant and undermining tax rates are the cause for Toyotas sudden official statement showing their dissatisfaction with the Indian market. India recognizing the difficulties faced by car manufacturers is planning to offer incentives worth nearly $23 billion in the hopes of attracting firms to set up manufacturing and scaling their businesses in India.

 

This article does not intend to hurt the sentiments of any individual, community, sect, or religion, etcetera. This article is based purely on the author’s personal opinion and views in the exercise of the Fundamental Rights guaranteed under Article 19(1)(A) and other related laws being enforced in India for the time being.

Section Editor: Pushpit Singh | 15 Sep 2020 19:46pm IST


Tags : Toyota, India, Businesses, FDI, Investment, Scaling, Manufacturer, Tax

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