Government Initiates Portal for Auto-Manufacturers to Apply for Electric Vehicle Scheme
In a bid to bolster the domestic electric vehicle (EV) industry, international automotive giants can now seek participation in India’s scheme aimed at promoting the production of electric passenger cars. The scheme offers significant reductions in import duties for manufacturers committing to invest in local EV manufacturing. Union Heavy Industries Minister H D Kumaraswamy recently launched the application portal, which will remain open for submissions until October 21.
Addressing concerns about Tesla’s intentions in India, Minister Kumaraswamy clarified that the company’s current focus is on establishing showrooms to sell vehicles rather than setting up manufacturing facilities within the country. He emphasized that several automakers have expressed initial interest in the scheme, with expectations of more applications as the submission window has officially opened.
Encouraging Domestic Investment and Manufacturing
Under the scheme, approved applicants must make qualified investments post-approval, ensuring that equipment and machinery are utilized effectively. The initiative mandates a gradual increase in domestic value addition (DVA) over time, with the requirement set at a minimum of 25% within three years and 50% within five years for OEMs availing reduced import duties.
The Ministry of Heavy Industries has the discretion to open the application window periodically until March 15, 2026. Automakers qualifying for the scheme can benefit from reduced duty rates on importing up to 8,000 EVs, subject to meeting substantial local manufacturing investment thresholds.
Key Guidelines and Investment Parameters
Applicants are obligated to establish manufacturing facilities within three years of approval, adhere to specified local content regulations, and commence operations in India. Eligible expenditures under the scheme cover plant infrastructure, equipment, engineering R&D, and charging facilities, while land costs are excluded from consideration.
Furthermore, applicants must demonstrate a robust financial standing with a global group revenue and fixed assets investment thresholds to be eligible for scheme benefits. Compliance with stipulated conditions and commitments must be supported by a bank guarantee, ensuring adherence to investment obligations.
Promoting Sustainable Growth in the EV Sector
The government’s emphasis on incentivizing local EV production aligns with broader efforts to boost sustainable mobility solutions and drive economic growth through technological innovation. By fostering a conducive environment for EV manufacturing, India aims to position itself as a key player in the global electric vehicle market.
