GOI Issues EV Manufacturing Policy To Boost Electric Car Production: Full Details

The Ministry of Heavy Industry has now issued a notification regarding detailed guidelines for the "Scheme to Promote Manufacturing of Electric Passenger Cars in India".Previously, the Department of Revenue, Ministry of Finance, had also issued the notification on 15th March 2024 for reduced import duties in line with the provisions of the Scheme. The application procedure is likely to begin by this month.

Under the policy, India is aiming to cut down the import taxes for foreign automakers, provided they invest in the country's EV production facilities. During the conference, Union Minister H.D. Kumaraswamy also clarified that Tesla is not expected to set up production in India and will rely on the Berlin-based facility, indicating that Tesla cars will arrive in India as CBU.

The government clarified that to encourage the global manufacturers to invest under the Scheme, the approved applicants will be allowed to import Completely Built-in Units (CBUs) of e-4W with a minimum CIF value of USD 35,000 at reduced customs duty of 15% for 5 years from the application approval date.

Further, the government is also focused on the localisation of EV manufacturing and has announced a minimum DVA of 25% to be achieved within 3 years and a minimum DVA of 50% to be achieved within 5 years from the date of issuance approval letter by MHI/ PMA.

During the announcement, Shri H.D. Kumaraswamy, Minister of Heavy Industries and Public Enterprises of India, said- "Under the visionary leadership of Hon'ble Prime Minister Shri Narendra Modi, the Ministry of Heavy Industries has approved a forward-looking scheme to promote the domestic manufacture of passenger cars, with a special focus on electric vehicles. This landmark initiative aligns with India's national goals of achieving Net Zero by 2070, fostering sustainable mobility, driving economic growth, and reducing environmental impact. It is designed to firmly establish India as a premier global destination for automotive manufacturing and innovation.

Further, the GOI says that with a minimum investment threshold of Rs 4,150 crore, the EV policy is set to provide an enabling policy environment for leading global and domestic players to establish long-term manufacturing footprints in the country.