New Delhi: The Indian government on Monday announced detailed guidelines for a new, forward-looking policy aimed at attracting fresh global investments in electric vehicle (EV) manufacturing and establishing India as a global hub for electric car production.
To encourage companies like U.S.-based Tesla and other global players, the scheme allows approved applicants to import completely built units (CBUs) of electric four-wheelers at a reduced customs duty of 15%—provided each unit has a minimum CIF (Cost, Insurance, and Freight) value of $35,000. This reduced duty will apply for five years from the date the application is approved.
To qualify, applicants must commit to a minimum investment of ₹4,150 crore under the scheme.
The scheme sets a cap of 8,000 electric cars per year that can be imported under this reduced duty rate. However, unused import quotas can be carried forward to subsequent years.
The maximum duty benefits per applicant will be limited to either ₹6,484 crore or the amount of the applicant’s committed investment (minimum ₹4,150 crore), whichever is lower.
The scheme will follow the Standard Operating Procedure (SOP) under the existing Production Linked Incentive (PLI) Scheme for the auto and auto components sector to determine the domestic value addition (DVA) of the eligible vehicles.
The DVA of vehicles produced in India will be certified by testing agencies approved by the Ministry of Heavy Industries.
Applicants must invest in domestic manufacturing of eligible products. For brownfield investments (expanding existing facilities), a clear physical separation from current operations is required.
Eligible expenditures under the scheme include spending on new plant, machinery, equipment, associated utilities, and engineering R&D. While land costs are not eligible, the cost of the main factory buildings and utilities will be counted—but only up to 10% of the total committed investment.
Similarly, investment in charging infrastructure will be considered, capped at 5% of the total committed investment.
To ensure compliance, each applicant must provide a bank guarantee from a scheduled commercial bank in India, equal to either the total duty foregone or ₹4,150 crore—whichever is higher—and this guarantee must remain valid for the duration of the scheme.
The government stated that the scheme aims to attract major global EV players, boost domestic manufacturing, create employment, and further the vision of ‘Make in India’.
This strategic initiative supports India’s broader national goals of achieving net zero emissions by 2070, promoting sustainable mobility, enhancing economic growth, and reducing environmental impact. It is positioned to establish India as a leading global destination for automotive innovation and EV production.
With inputs from IANS