In an effort to draw in foreign investment and position India as a hub for EV manufacture, the Ministry of Heavy Industries (MHI) has approved a plan to encourage local passenger car production, particularly electric vehicles.
Before being eligible for benefits, such as customs duty reductions on specific imports, manufacturers must invest a minimum of INR 41.5 billion (USD 479 million) over three years, submit an application, and obtain MHI clearance.
Scheme benefits are:
- An ability to import completely built-in units of electric four-wheel drive systems (e-4Ws) at a minimum value of USD 35,000 at a reduced customs duty of 15% for five years;
- A maximum of 8,000 e-4Ws will be allowed in a year, with the unused limit carried over to the next year; and
- Total duty waived cannot exceed INR64.84 billion or the minimum required investment amount per applicant, whichever is lower.
Online applications for MHI approval will begin soon.
Additionally, manufacturers must add at least 25% of domestic value within three years and 50% within five years after the date of MHI approval. Indian talents are utilised to establish the nation as a hub for EV manufacturing thanks to the domestic value-addition criterion.
The plan also supports India’s objective of achieving net zero emissions by 2070, which would result in sustainable transportation, economic expansion, and a less negative influence on the environment.