The Government of India has launched the “Scheme to Promote Manufacturing of Electric Passenger Cars in India” (SPMEPCI), rolled out by the Ministry of Heavy Industries. The initiative aims to position India as a global hub for electric passenger vehicles, supporting its net-zero emissions goal by 2070 and dovetailing with flagship programmes like Make in India and Aatmanirbhar Bharat.
Key incentives under the scheme include a reduced customs duty of 15% on fully built electric cars (CBUs) with a minimum CIF value of USD 35,000, applicable for five years. The concession covers up to 8,000 imported units annually, with unused quotas carry-forward provisions.
To qualify, companies must commit a minimum investment of ₹4,150 crore (about USD 500 million) within three years of approval. Further, manufacturers must achieve at least 25% domestic value addition within three years and 50% within five years, promoting localisation of EV production.
Safeguards include a bank guarantee equating to the duty benefit (capped at ₹6,484 crore) or the investment amount—whichever is higher. The guarantee acts as a financial deterrent to discourage companies from availing concessions without meeting investment and localisation milestones.
Industry response is strong, with global manufacturers like Mercedes‑Benz, Volkswagen, and Skoda‐VW expressing interest in investing under the scheme. However, Tesla has reportedly ruled out local manufacturing, opting only for sales operations, and thus does not qualify for concessions.
This scheme complements other government measures such as PM E‑DRIVE, PLI for automotive components, and FAME‑II. Together, they aim to build a resilient electric mobility ecosystem—spanning vehicle assembly, battery production, charging infrastructure, and EV component value chains
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