New Delhi, June 2: The Indian government has launched a forward-looking scheme to position the country as a global hub for electric vehicle (EV) manufacturing, targeting major international players such as Tesla. The initiative is expected to drive significant foreign investment into the EV sector while boosting domestic production capacity.
Under the scheme, approved companies will be allowed to import fully built electric four-wheelers with a minimum CIF (cost, insurance, and freight) value of $35,000 at a reduced customs duty of 15% for a period of five years. However, the number of such vehicles permitted for import at the concessional rate will be capped at 8,000 units per year, with carryover allowed for unutilized quotas.
To qualify for these incentives, applicants must commit to a minimum investment of ₹4,150 crore. The total duty foregone for each applicant will be limited to ₹6,484 crore or the amount of investment committed, whichever is lower.
The policy mandates that the investment must go towards manufacturing eligible products in India. For brownfield investments, clear physical separation from existing operations is required. Eligible expenses include new plant and machinery, equipment, utilities, and engineering R&D. While the cost of land will not be considered, up to 10% of the committed investment can be allocated to buildings associated with the main plant and utilities. Investment in charging infrastructure is permitted up to 5% of the total commitment.
The scheme will be implemented in line with the Standard Operating Procedure (SOP) under the Production Linked Incentive (PLI) Scheme for the automobile sector. Certification of domestic value addition (DVA) will be carried out by testing agencies approved by the Ministry of Heavy Industries.
Approved applicants must also furnish a bank guarantee from a scheduled commercial bank in India, covering the duty to be forgone or ₹4,150 crore, whichever is higher. The guarantee must remain valid throughout the scheme’s tenure.
This landmark initiative is expected to attract global EV manufacturers, create employment opportunities, and support the ‘Make in India’ mission. It also aligns with India’s broader environmental goals, including achieving net-zero emissions by 2070, and aims to establish the country as a premier global destination for clean mobility and automotive innovation.
