Government approves new EV policy to attract big investment in manufacturing

  • Industry News
  • Mar 15,24
As per the policy, electric vehicle maker will have to make minimum investment of Rs 4150 crore to set up manufacturing facilities in India, and 50 per cent domestic value addition to be reached within 5 years at the maximum
Government approves new EV policy to attract big investment in manufacturing

New Delhi

The Union Government has approved a scheme to promote India as a manufacturing destination for electric vehicles (EV) with the latest technology. The policy is designed to attract investments in the EV space by reputed global manufacturers.

This will provide Indian consumers with access to latest technology, boost the Make in India initiative, strengthen the EV ecosystem by promoting healthy competition among EV players leading to high volume of production, economies of scale, lower cost of production, reduce imports of crude oil, lower trade deficit, reduce air pollution, particularly in cities, and will have a positive impact on health and environment.

Minimum investment of Rs 4,150 crore (approximately $ 500 million) is required by the EV manufacturer with no cap on maximum investment. There will be a 3-year timeline for setting up manufacturing facilities in India, and to start commercial production of electric vehicles, and reach 50 per cent domestic value addition (DVA) within 5 years at the maximum.

Timeline for manufacturing: 3 years for setting up manufacturing facilities in India, and to start commercial production of e- vehicles. A localisation level, i.e. domestic value addition (DVA), of 25 per cent by the third year and 50 per cent by the fifth year will have to be achieved.

The customs duty of 15 per cent, as applicable to completely knockdown (CKD) units, will be applicable on vehicle of minimum CIF value of $ 35,000 and above for a total period of 5 years subject to the manufacturer setting up manufacturing facilities in India within a 3-year period. 
The duty foregone on the total number of EV allowed for import would be limited to the investment made or Rs 6484 crore (equal to incentive under PLI scheme) whichever is lower. A maximum of 40,000 EVs at the rate of not more than 8,000 per year would be permissible if the investment is of $ 800 million or more. The carryover of unutilised annual import limits would be permitted.

The investment commitment made by the company will have to be backed up by a bank guarantee in lieu of the custom duty forgone. The Bank guarantee will be invoked in case of non-achievement of DVA and minimum investment criteria defined under the scheme guidelines.

Industry reaction
According to Raman Bhatia, Founder & Managing Director, Servotech Power Systems Ltd, the new electric vehicle policy will make India a global powerhouse for EV manufacturing. “It is a boon for India’s booming economy and acts as a major push forward in the nation’s aspirations for clean transportation. Keeping a strong focus on prioritizing domestic manufacturing and encouraging competition and growth, this policy will provide enough chances and harbour enough space to facilitate increasing the adoption of EVs across the nation and aligns with the Make in India initiative promoting local production and job creation. This policy acts as a gateway for large-scale investments from global EV giants like Tesla, making India an EV manufacturing hub globally and providing the much-needed impetus for the local players to enhance their manufacturing capacities and adapt high-tech EV technologies. This healthy rivalry will drive innovation, reduce production costs, and ultimately benefit Indian consumers with a broader range of high-quality, affordable EVs,” he added.

Related Stories

Machine Tools & Accessories
Aerospace has emerged as a key demand driver for Trishul Machine Tools.

Aerospace has emerged as a key demand driver for Trishul Machine Tools."

In a candid conversation, C S Shiva Shankaraiah, Managing Director, Trishul Machine Tools Pvt Ltd, delves into the company's journey and emerging prospects for its future growth

Read more
Smart Manufacturing
Israel based EVR Motors to setup manufacturing unit in India

Israel based EVR Motors to setup manufacturing unit in India

The company has already secured commercial agreements with prominent Indian automotive firms.

Read more
Policy Regulation
India to become landfill for Chinese products amid US Beijing tariff war; GTRI

India to become landfill for Chinese products amid US Beijing tariff war; GTRI

These tariffs include a 100% duty on electric vehicles, a 50% duty on semiconductors, and a 25% duty each on electric vehicle batteries originating from China.

Read more

Related Products

Tata Motors unveils facilities for development of Hydrogen propulsion tech

AUTO COMPONENTS & ACCESSORIES

Tata Motors, India?s largest automobile company, unveiled two state-of-the-art & new-age R&D facilities for meeting its mission of offering sustainable mobility solutions. The unveilings constitute of Read more

Request a Quote

Tata Motors plans petrol powertrain for Harrier and Safari SUVs

AUTO COMPONENTS & ACCESSORIES

Tata Motors is in the process of developing a new petrol powertrain for its premium sports utility vehicles, the Harrier and Safari, as confirmed by a senior company official. Currently, these models Read more

Request a Quote

Electric Vehicle Charger

AUTO COMPONENTS & ACCESSORIES

RRT Electro is engaged in manufacturing of customized Power Electronic Products over two decades having capability to Design, Develop, Prototyping, Regulatory Compliance testing & Certification, Manuf Read more

Request a Quote

Hi There!

Now get regular updates from IPF Magazine on WhatsApp!

Click on link below, message us with a simple hi, and SAVE our number

You will have subscribed to our Industrial News on Whatsapp! Enjoy

+91 84228 74016

Reach out to us

Call us at +91 8108603000 or

Schedule a Call Back