The Ministry of Heavy Industries plans to hold a second round of discussions with stakeholders within the next month or two to issue draft guidelines for the newly developed electric vehicle (EV) policy. A senior official announced that this policy aims to attract global automakers, such as Tesla, to set up manufacturing operations in India. Automakers looking to receive incentives under the policy will need to make new investments as per the updated regulations; previous investments will not be considered.
This directive was communicated to Vinfast, a Vietnamese electric car manufacturer, which announced plans in February to invest USD 500 million (approximately Rs 4,000 crore) in Tamil Nadu over five years, according to the official.
In a significant step to revolutionize the EV landscape in India, the government approved the Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI) on March 15, 2024. The first stakeholders’ meeting took place in April, with representation from Tesla’s advisor, The Asia Group (TAG).
“We have received various representations and reviewed them. Therefore, we plan to hold the second consultative meeting within a month or two to finalize the guidelines,” the official explained. Highlighting the government’s commitment to a consultative process, he added, “We will draft the guidelines and circulate them among potential applicants before convening another consultative meeting.”
When asked about inviting Tesla for the second consultative meeting, he responded, “We will invite all interested parties.”
Eligible firms under the SPMEPCI can import vehicles at a reduced duty if they commit to a USD 500 million greenfield investment. The official clarified that the scheme, announced on March 15, stipulates a 120-day window or longer for companies to apply, starting July 31 or later. During this period, companies can submit their applications, which will then be evaluated by the government.
Vinfast asked whether previous investments would be taken into account, but the government confirmed they would not. “They mentioned they would pause any further investments until the scheme is finalized. We concurred,” the official noted, stressing that only new investments would be considered under the five-year scheme, which may be reopened in the future.
Under the policy, manufacturers setting up EV passenger car manufacturing facilities with a minimum investment of Rs 4,150 crore (USD 500 million) in India will be permitted to import a limited number of vehicles at a reduced customs duty of 15% on vehicles priced above USD 35,000 for five years from the date of government approval. These facilities must become operational within three years and achieve a minimum domestic value addition (DVA) of 25% within the same period, increasing to 50% within five years from the date of approval by the Ministry of Heavy Industries.
