Sri Lankan Government’s Proposal Bad News for Indian Auto Rickshaw Makers

The Sri Lankan government's decision to promote use of electric cars in the country may result in drop in export figures and revenues for auto rickshaw makers in India. Sri Lanka, in a bid to combat pollution, has decided to replace three-wheelers with electric cars.

Ravi Karunanayake, Finance Minister, Sri Lanka, while delivering the 2017 budget speech in the parliament, announced that the Government is keenly looking towards curbing pollution in the country. The government, along with providing subsidy on interest charged for buying electric vehicles, also plans to reduce excise duty charged on them.

The minister said, "As an initial step, the government will within the Colombo district, extend its support by introducing a loan scheme to purchase 1,000 such electric cars, through the banks, where the government will bear 50 per cent of the interest cost for which I propose to allocate Rs 200 million."

He continued, "We have nearly 1.3 million three-wheelers operating on our roads and they are the most vulnerable to accidents. To improve safety of the drivers as well as passengers, I encourage the replacement of three-wheelers with electric cars."

A new tax by the name of ‘Carbon Tax’ will also be introduced in the country. The tax will be levied on all the vehicles, barring tractors and electric cars.

While the news will make environmentalists happy, it may also affect the profit sheets of auto-rickshaw makers operating in the country. India's Bajaj Auto exports the highest number of three-wheelers to the Sri Lankan market.