India to Finalize EV Manufacturing Scheme Guidelines Soon

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EV Manufacturing Scheme Guidelines

While major global carmakers like Mercedes-Benz, BMW, and Hyundai participated in consultations, the much-awaited Tesla’s participation remains unclear.

The Central Government is expected to roll out the final guidelines of the proposed Electric Vehicle Manufacturing Scheme soon to attract EV manufacturers across the globe to invest in India by offering them lower import duties. The Department for Promotion of Industry and Internal Trade (DPIIT) Secretary, Rajesh Kumar Singh, confirmed that the Ministry of Heavy Industries (MHI) will finalize the scheme’s guidelines “within weeks.”

The scheme is designed to attract a wide range of manufacturers. “We are not calling any original equipment manufacturers (OEMs) for meetings specifically,” said an MHI official. Companies interested in participating can submit applications online once the guidelines are released.

While major global carmakers like Mercedes-Benz, BMW, and Hyundai participated in consultations, the much-awaited Tesla’s participation remains unclear. According to a Bloomberg report, Tesla is not planning any fresh investments in India now. Tesla did not respond to requests for comment.

The government has clarified the definition of “investment” for the scheme, aligning it with the existing Production-Linked Incentive (PLI) scheme for the auto sector. This means investments in plant, machinery, equipment, and related infrastructure will qualify. Royalty payments for technology imports will not be considered investments.

Reduced Import Duties with Conditions

The new EV policy offers reduced import duties for manufacturers who commit to:

* Investing at least $500 million (Rs 4,150 crore)
* Establishing a manufacturing plant within three years
* Achieving a minimum domestic value addition (DVA) of 25% within three years, increasing to 50% by the fifth year

Import duties on electric vehicles with a CIF (cost, insurance, and freight) value of $35,000 and above will be reduced to 15% for five years, compared to the current 70-100% range. This benefit is only available to companies meeting the investment threshold.

Photo Credit : Unsplash

Source: ESG Time

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