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New Delhi: The Union Government has given the green light to an E-Vehicle policy to position India as a leading manufacturing hub for electric vehicles (EVs). The policy seeks to attract investments from global EV giants and develop a strong ecosystem for electric mobility within the country.
The policy aims to provide Indian consumers access to cutting-edge EV technology, as well as align with the Make in India initiative, reduce dependence on crude oil imports, lower the trade deficit, and mitigate air pollution, especially in urban areas. The move is expected to have positive ramifications on public health and the environment.
Key highlights of the policy include:
- Minimum investment requirement of Rs 4150 Cr (∼USD 500 Mn).
- No maximum limit on investment.
- Timeline of 3 years to set up manufacturing facilities and begin commercial production.
- Target to add 25% domestic value within three years and 50% within 5 years.
- 15% customs duty applicable to imported vehicles with a CIF value of at least USD 35,000 for five years, provided the manufacturer establishes manufacturing facilities in India within three years.
- Duty exemption for imported EVs will be capped at either the investment made or ₹6484 Cr (equivalent to the PLI scheme incentive), whichever is lower. Up to 40,000 EVs can be imported at a maximum rate of 8,000 per year with investments of USD 800 Mn or more. Unused import limits can be carried over.
- Companies must provide a bank guarantee for the customs duty forgone based on their investment commitment.
- The bank guarantee will be used if the company fails to meet the Domestic Value Addition (DVA) and minimum investment criteria outlined in the scheme guidelines.
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