India's Electric Car Manufacturing Scheme Unveiled: Pioneering Green Growth

The Ministry of Heavy Industries has released guidelines for India's electric car scheme, officially kicking off the application process. The initiative offers tax incentives to companies investing in local production, aligning with broader policies like the India-UK FTA. Key companies are likely to lead this transformative push towards sustainable mobility.

The Ministry of Heavy Industries has announced comprehensive guidelines for its ambitious electric vehicle manufacturing scheme. Titled the 'Scheme to Promote Manufacturing of Electric Passenger Cars in India' (SPMEPCI), this initiative was initially approved in March 2024. Today, it embarks on a critical phase by starting its much-awaited application process.

Under the scheme, approved enterprises can import fully assembled electric vehicles (CBUs) valued at a minimum USD 35,000 with a reduced customs duty rate of 15% for a period of five years. However, beneficiaries must pledge investments of Rs 4,150 crore (USD 500 million) for establishing domestic manufacturing facilities, ensure stipulated domestic value addition, and adhere to PLI Auto Scheme standards.

In a bid to support robust electric vehicle manufacturing, the guidelines impose strict eligibility criteria, stressing a minimum of Rs 10,000 crore in global automotive revenues and Rs 3,000 crore in fixed assets. As companies await the formal application opening, early adopters like Tata and Mahindra may seize this opportunity rapidly, though true benefits may unfold over time in sync with India's trade agreements and policy directions.

(With inputs from agencies.)