It has no domestic car industry worth the name, but next-door neighbour Bangladesh has taken the lead in promoting eco-friendly cars.
To encourage hybrid and electric vehicles, the country has slashed import duties on them to 56 per cent, from 195 per cent.
The move is all the more remarkable because Bangladesh had hiked duties on almost all segments of cars only last year.
Duties on conventional cars were hiked from 23 percentage points for small cars to 395 percentage points on big cars.
The concession on hybrid cars has led Honda to launch its Civic Hybrid in the country in December, and Toyota is likely to follow suit with the Prius.
“What Bangladesh has done is incredible in the sense that the country does not have domestic car manufacturing and the industry mostly comprises imported used cars,” said Jnaneshwar Sen, vice-president (marketing), Honda Siel Cars India. “Even then the government is concerned about environment and the step is commendable.”
Thanks to the downward revision in duties, the Civic Hybrid is much cheaper than the Civic petrol in Bangladesh. It costs 23.80 lakh Bangladesh taka against 46.33 lakh taka for the petrol variant.
Honda hopes to sell 150-200 hybrid Civics this year.