India Unveils New EV Policy to Boost Local Manufacturing

India has launched a transformative electric vehicle (EV) policy, the Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI), aimed at positioning the country as a global EV manufacturing hub. Announced by the Ministry of Heavy Industries, the policy slashes import duties on EVs from 70-110% to 15% for vehicles priced at $35,000 (approximately ₹30 lakh) or less, incentivizing global automakers to invest in local production.

To get the tax break, companies need to pour at least ₹4,150 crore ($500 million) into setting up EV plants within three years. They also have to use 25% locally made parts within three years, ramping up to 50% by year five, tying into the ‘Make in India’ push. To qualify, firms need to be heavy hitters with ₹10,000 crore in yearly automotive revenue and ₹3,000 crore in fixed assets. Approved companies can bring in up to 8,000 EVs annually at the lower tax rate, with a cap on total tax savings at ₹6,484 crore.

• India cuts EV import duty to 15% to lure ₹4,150 crore global investments in local plants
• New policy mandates 50% local EV parts by year 5 to fuel 'Make in India' drive
• Big players like Hyundai, VW, Kia eye entry as India targets 30% EV sales by 2030

Union Minister H.D. Kumaraswamy said global brands like Mercedes-Benz, Volkswagen-Skoda, Hyundai, and Kia are keen to jump in, but Tesla seems more focused on opening showrooms for imported cars than building factories here. The policy doesn’t count land costs toward the investment and limits spending on charging stations to 5% of the total. Companies also need to put up a bank guarantee to show they’re serious.

India’s EV market is still small, making up just 2.5% of car sales in 2024, but the government wants that to hit 30% by 2030. Local players like Tata Motors and Mahindra & Mahindra are ready to shine, though smaller companies might struggle with the tough requirements. The policy also tackles hurdles like the lack of fast-charging stations, which has kept some buyers on the fence.

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This big move is set to bring in huge investments, create jobs, and help India cut down on carbon emissions as it works toward a net-zero future by 2070. Applications for the scheme are opening soon, and we could see made-in-India EVs rolling out in the next few years.