Govt Notifies Scheme to Promote Manufacturing of Electric Passenger Cars in India

GG News Bureau
New Delhi, 2nd May: The Government of India has announced detailed guidelines for the “Scheme to Promote Manufacturing of Electric Passenger Cars in India” (SPMEPCI), aimed at boosting domestic production of electric vehicles (EVs). The scheme, led by the Ministry of Heavy Industries (MHI), seeks to attract significant investments from global manufacturers and position India as a leading global hub for EV manufacturing.

This initiative aligns with India’s national commitment to achieve net zero emissions by 2070 and supports sustainable mobility, economic growth, and the government’s flagship “Make in India” and “Aatmanirbhar Bharat” programs. Under the scheme, approved manufacturers must commit a minimum investment of Rs. 4,150 crore (approximately USD 500 million) over three years and meet domestic value addition targets of 25% within three years and 50% within five years.

Union Minister H.D. Kumaraswamy emphasized that the scheme is designed to create an enabling policy environment for both global and domestic EV manufacturers. He highlighted that the scheme balances customs duty concessions with clear milestones for local manufacturing capacity and innovation, aiming to make India a premier destination for EV production.

The scheme allows approved applicants to import electric passenger cars (Completely Built Units or CBUs) with a minimum CIF value of USD 35,000 at a reduced customs duty rate of 15% for five years from the date of approval. However, imports are capped at 8,000 vehicles per year, with provisions to carry forward unused import limits.

Manufacturers must establish production facilities and begin manufacturing electric four-wheelers within three years of approval. Investments eligible under the scheme include spending on plant, machinery, engineering research and development, and charging infrastructure, though land costs are excluded. Additionally, a bank guarantee equal to the duty foregone or Rs. 4,150 crore will be required to ensure compliance.

The Ministry of Heavy Industries will soon open an online application window for interested manufacturers for a period of 120 days, extendable till March 15, 2026. Applicants must pay a non-refundable fee of Rs. 5 lakh to apply.

This strategic move is expected to accelerate the growth of the EV sector in India, generate employment opportunities, and solidify the country’s position on the global EV manufacturing map.