With reduced import duties, strict localisation targets, and high investment thresholds, the government’s latest initiative aims to transform India into a leading electric vehicle manufacturing hub. Here are ten key takeaways from the Central Government’s newly introduced EV policy guidelines,
- EV Sector Push: The Indian government has rolled out new guidelines to boost electric vehicle (EV) production, aligning with its goals for green mobility and sustainable industrial growth.
- Policy by MHI: The Ministry of Heavy Industries (MHI) is spearheading the initiative, aiming to attract significant investments and generate employment within the EV ecosystem.
- Dedicated Portal for Applications: A new portal will be launched for businesses to submit their proposals. This window will be open for at least 120 days.
- Eligibility Criteria: Only vehicle manufacturers with a minimum revenue of ₹10,000 crore and fixed asset investments worth ₹3,000 crore can apply under this scheme.
- Application Fee: Companies must pay a non-refundable application fee of ₹5 lakh to participate in the program.
- Make in India Boost: Union Minister H D Kumaraswamy emphasized that the policy reinforces the Make in India campaign and aims to position India as a global automotive hub.
- Import of High-End EVs: The policy permits limited imports (up to 8,000 units over five years) of electric vehicles valued at USD 35,000 or more, at a reduced 15% customs duty rate.
- Customs Duty Relief: The total tax concession under this scheme is capped at ₹6,484 crore, offering a significant incentive to global players.
- Investment Requirement: Approved companies must invest at least ₹4,150 crore (approx. USD 500 million) within three years and begin local manufacturing during that period.
- Localisation Mandate: Firms must achieve 25% domestic value addition (DVA) within the first three years, increasing to 50% by the fifth year. Only specific expenditures, excluding land costs, will count toward investment compliance.