Indian Economy News

Government notifies guidelines for scheme to promote manufacturing of electric passenger cars in India

The Ministry of Heavy Industries has notified guidelines for a scheme to promote the manufacturing of electric passenger cars in India. The scheme aims to attract fresh investments from global manufacturers and position India as a global manufacturing destination for electric vehicles. Aligned with India’s goal of achieving net zero by 2070, the initiative fosters sustainable mobility and economic growth. Approved applicants will be allowed to import Completely Built-in Units (CBUs) of electric four-wheelers with a minimum CIF value of Rs. 29,89,036 (US$ 35,000) at a reduced customs duty of 15% for five years. A minimum investment of Rs. 4,150 crore (US$ 485.95 million) is required from applicants. The scheme mandates a minimum Domestic Value Addition (DVA) of 25% within three years and 50% within five years. Investment should be made in domestic manufacturing, with specific guidelines for brownfield projects and expenditure on plant, machinery, and R&D. A bank guarantee equivalent to the total duty to be foregone or Rs. 4,150 crore (US$ 485.95 million), whichever is higher, is required to back the applicant’s commitment.
The application window will be open for 120 days or more, with a non-refundable application fee of Rs. 5,00,000 (US$ 5,855). Applicants must meet eligibility criteria, including a minimum global group revenue of Rs. 10,000 crore (US$ 1.17 billion) from automotive manufacturing and a minimum global investment of Rs. 3,000 crore (Rs. 351 million) in fixed assets. The scheme is designed to boost the ‘Make in India’ and ‘Aatmanirbhar Bharat’ initiatives, encouraging both global and domestic companies to become active partners in India’s green mobility revolution.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.