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Informist, Monday, Jun. 2, 2025

 

--Minister Kumaraswamy: Portal to avail e-Vehicle plan for EV mfg to open soon 
--CONTEXT: Heavy Industries Minister Kumaraswamy addressing press briefing 
--Minister Kumaraswamy: Tesla not interested in manufacturing in India 
--Minister Kumaraswamy: See minor impact from US' increased duty on metals 
--Kumaraswamy: Hyundai, Kia showed interest in e-Vehicle policy 
--Kumaraswamy: Mercedez Benz, Skoda Auto showed interest in e-Vehicle policy 
 

NEW DELHI - The government Monday notified the guidelines for its scheme to promote manufacturing of electric vehicles in India by global automotive giants. The 'Scheme to Promote Manufacturing of Electric Passenger Cars in India', initially launched in March 2024, has failed to buoy the interest of Elon Musk-led Tesla Inc, as the US-based electric vehicle company has opted to sell its cars in India through showrooms and not manufacture them locally, Minister of Heavy Industries H.D. Kumaraswamy told reporters.

 

So far, German companies including Mercedes-Benz, and Volkswagen VW, Czech Republic's Skoda Auto and South Korean companies such as Hyundai Motor and Kia have shown interest in the scheme, Kumaraswamy said. The portal to avail benefits of the scheme will open soon. Unlike the production-linked incentive scheme, companies setting up charging infrastructure for passenger electric vehicles can also claim benefit under this scheme, but only 5% of the committed investment.

 

Global manufacturers can import completely built-in units with a minimum value of $35,000 at reduced customs duty of 15% for five years after their applications for the scheme are approved. "It's a big opportunity in India to become a leader in electric vehicle production by attracting top global players for Make in India. Promoting manufacturing of e-passenger vehicle is the main objective of this scheme," Kumaraswamy said. Companies are currently charged a custom duty of 70-100% on car imports. 
 

Companies that opt for the new plan, can import only 8,000 cars per year, and can carry forward any un-met quota for the year to the next year. They will have to commit to a minimum investment of INR 41.5 billion, or around $500 million for three years. Once the approval is granted, the applicant will have to set up the manufacturing facility and commence operations within three years. A domestic value addition of minimum 25% has to be achieved within three years, and minimum of 50% within five years after approval. 

 

The maximum duty foregone by each applicant has been limited to either INR 64.8 billion or its committed investment of INR 41.5 billion, with the government opting for the lower among the two. To be eligible for the scheme, companies must have earned a revenue of at least INR 100 billion from automotive manufacturing. Global companies which have invested at least INR 30 billion in fixed assets can also apply for the scheme. While no company has made a formal commitment towards this policy yet, the government expects a response once the portal opens.

 

Recently, the Chinese government tweaked its regulations for companies looking to import rare earth magnets. To procure this raw material, an essential part of electric vehicles, China has asked importing companies for an end-user certificate which has to be endorsed by the Indian government and approved by the Chinese government. Kumaraswamy said industry stakeholders might go to China in the coming two-three weeks to discuss the issue with the authorities there.

 

The minister said he expects a minor impact due to additional 25% tariffs announced by the US on imports of steel there. "...we are not exporting (steel) in a big way. Consignment which was already on the way, if they reach after Jun. 4 they will have to pay 50%," Kumaraswamy said.  End

 

Reported by Anand JC

Edited by Vandana Hingorani

 

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