Skoda has paused the imports of completely assembled petrol, diesel, and battery electric vehicles to India due to the pending clarification of customs duty regulations.
After the introduction of the latest iteration of its flagship SUV, the Kodiaq, in India, the Czech automaker declared a pause on the import of CBU vehicles—including diesel, petrol, and electric models—until the Indian government clarifies customs duties.
The company further noted that Skoda has decided to postpone its plans for domestic electric vehicle production, until the government finalizes fuel efficiency standards under CAFE 3 (Corporate Average Fuel Efficiency).
Petr Janeba, Skoda Auto India’s Brand Director, told ET Auto that the uncertainty surrounding customs duties, which are likely to be reduced, raises doubts about the feasibility of importing CBU vehicles at this time. He further mentioned that a resolution on customs duties is expected within the next three months, after which Skoda may evaluate the possibility of launching an electric vehicle in India this year.
According to a report by Times Drive, the Indian government had accused Skoda VW of tax evasion amounting to approximately $1.4 billion, alleging the use of a ‘part-by-part import strategy’ to bypass taxes on imported vehicles. In response, the automaker filed a legal petition to challenge these claims. It now appears that Skoda is adopting a strategy of suspending imports and postponing electric vehicle production in India.
The automaker anticipates that a potential reduction in customs duties following India’s proposed free trade agreement with the European Union could significantly enhance the feasibility of vehicle imports. Additionally, a bilateral trade agreement with the United States is expected to play a key role. At present, India imposes a customs duty of 110% on fully built cars priced above $40,000 and 70% on those costing up to $40,000.
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