Context:

The Ministry of Heavy Industries (MHI) has issued comprehensive guidelines for the Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI).The scheme is designed to attract global investments, boost local manufacturing, and help India meet its ambitious Net Zero by 2070 target.

Objective of the Scheme:

·         Attract fresh investments from global EV manufacturers

·         Promote India as a manufacturing destination for electric vehicles

·         Support the Make in India and Aatmanirbhar Bharat initiatives

·         Generate employment and reduce environmental impact

Key Features of the Scheme:

1. Import Duty Concessions

·         Approved applicants can import Completely Built Units (CBUs) of electric four-wheelers with a minimum CIF (Cost, Insurance, and Freight) value of $35,000 at a reduced customs duty of 15%.

·         This reduced rate will apply for five years from the date of approval.

·         Import limit: A maximum of 8,000 electric vehicles per year. Unused annual import quota can be carried forward.

·         Total duty foregone is capped at the lower of ₹6,484 crore or the amount of investment made by the applicant.

2. Investment Criteria

·         Minimum investment: ₹4,150 crore (~$500 million) to be made within three years of approval.

·         No upper limit on investment.

·         Investments can be made in greenfield or brownfield projects (the latter must be physically demarcated from existing operations).

·         Eligible expenditures include:

o    New plant, machinery, and equipment

o    Associated utilities and R&D infrastructure

o    Buildings (up to 10% of total investment)

o    Charging infrastructure (up to 5% of total investment)

3. Domestic Value Addition (DVA) Requirements

To qualify and retain benefits, approved manufacturers must:

·         Achieve minimum 25% DVA within 3 years

·         Achieve minimum 50% DVA within 5 years

·         DVA certification will follow procedures outlined under the PLI Auto Scheme and be conducted by agencies approved by MHI.

4. Bank Guarantee

Applicants must provide a Bank Guarantee (BG) from a scheduled commercial bank in India equivalent to:

·         The total duty to be forgone, or

·         ₹4,150 crore, whichever is higher.

Eligibility Criteria:

To qualify for the scheme, applicants must meet the following thresholds:

Strategic Importance:

This policy represents a carefully calibrated effort to:

·         Introduce international EV brands to the Indian market

·         Encourage them to set up manufacturing bases in the country

·         Ensure technology transfer and localization

·         Create a comprehensive EV ecosystem, including supply chains and charging infrastructure

Conclusion:

With these guidelines, India is now positioned to become a global EV manufacturing powerhouse, attracting the world’s top electric carmakers while nurturing domestic capabilities for long-term sustainable growth.