The Indian government has launched an online portal for companies to apply for a new electric vehicle (EV) manufacturing scheme, offering reduced import duties. Applications are open until 21 October 2025.
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Incentivising Local Production
The Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMPCI) permits global carmakers to import up to 8,000 Completely Built-Up (CBU) electric cars annually, with a minimum Cost, Insurance, and Freight (CIF) value of $35,000, at a 15 per cent customs duty for five years. This is down from 70–110 per cent.
To qualify, firms must invest at least ₹4,150 crore in Indian manufacturing facilities and begin production within three years. They need to achieve 25 per cent domestic value addition within three years, rising to 50 per cent by the fifth year.
Financial Guarantees
Companies must secure their investment with an irrevocable bank guarantee from a scheduled Indian commercial bank, covering the forgone customs duty. This will be enforced if firms fail to meet investment or value addition targets.
Recent guidelines expand eligibility to brownfield projects, requiring clear separation from existing facilities. Investments can include research and development (R&D) without limits, while up to 5 per cent of funds can support EV charging infrastructure.
Strengthening India’s EV Sector
By lowering import duties, the scheme aims to draw global manufacturers to set up production in India. The emphasis on domestic value addition ensures economic benefits, such as job creation and technology transfer.
The policy positions India as a potential hub for EV manufacturing, tapping into the global shift towards sustainable mobility. It encourages carmakers to integrate into India’s supply chain, boosting local industry.
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