The Ministry of Heavy Industries has introduced new guidelines for the Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI), effective from June 2, 2025. Originally notified on March 15, 2024, this scheme aims to boost India’s position as a global manufacturing hub for electric passenger cars, encourage investment, create jobs, and support the “Make in India” initiative. In line with this, the Ministry of Finance’s Department of Revenue also issued notifications on the same day to lower import duties, aligning with the scheme’s goals. These updated guidelines are intended to ensure smooth and effective implementation of the scheme.
The scheme defines important terms for clarity. Applicants must submit an online application form through the Ministry’s portal along with supporting documents and also send a hard copy. In case of any differences, the online submission will be considered final. A Chartered Engineer involved in the process must be certified and empanelled with the Project Management Agency (PMA). Committed Investment means the total amount the applicant promises to invest, with a minimum set at ₹4,150 crore. The total benefit of duty foregone is capped at ₹6,484 crore or the committed investment, whichever is lower. The Date of Commencement of Operations is when the first commercial sale of an eligible product is invoiced under the scheme. Duty Foregone refers to the financial benefit from reduced customs duties on imported electric four-wheelers (e-4W), which must be battery-operated and approved for sale in India.
The number of electric cars allowed for import depends on factors like investment amount, customs duty, exchange rate, and the CIF value of the vehicle. For example, with a ₹4,150 crore investment, a vehicle priced at USD 35,000 CIF, and an exchange rate of ₹85 per USD, a maximum of 24,155 units can be imported. If the investment rises to ₹6,484 crore, this number increases to 37,740 units. However, if the CIF price is higher, like USD 50,000, the import limit reduces to 9,789 units for the same investment.
Investments must be recorded in the company’s books after approval and must target domestic manufacturing of eligible products. For brownfield projects, the manufacturing area must be demarcated. While the plant location is fixed, charging infrastructure can be set up elsewhere across India. Investments in charging stations are eligible for up to 5% of the committed investment, provided they meet the Ministry of Power’s fast-charging guidelines. In-house Engineering Research and Development costs are also eligible if capitalized, but recurring royalty payments and subcontracted R&D are excluded. Several types of investments such as land, administrative buildings, recurring expenses, and leased assets are not eligible.
Applicants must meet strict eligibility criteria and provide an unconditional bank guarantee valid for at least six years. Foreign investment must follow India’s FDI policy. Revenue or investments by individual promoters are not counted towards group revenue or investment. Companies with Non-Performing Assets, defaulters, or those involved in fraud cases are disqualified. No insolvency proceedings should be ongoing, and a Company Secretary must certify compliance.
The application requires submission of a form with financial and supporting documents and a ₹5 lakh non-refundable fee. Incorrect information can lead to rejection. A unique Application ID is generated after successful submission, and a hard copy must be sent to the Ministry in New Delhi. Approval letters are issued by the PMA within five working days after Ministry approval.
An inter-ministerial Scheme Sanctioning Committee, led by the Secretary of Heavy Industries, monitors the scheme. It includes members from ministries such as NITI Aayog, Revenue, Commerce, and Power, among others.
To benefit from lower customs duties, approved applicants must get a certificate from a Joint Secretary-level officer confirming compliance. Annual import applications must be filed, with the first due within 30 days of approval, and subsequent applications due 60 days before each year starts. Investment progress is reviewed by the PMA with reports, audits, and site inspections. Misrepresentation can lead to penalties, refund demands with interest, blacklisting, and legal action. Changes in project location require Ministry approval.
Operations must start within three years, with revenue targets of ₹5,000 crore in year 4 and ₹7,500 crore in year 5. Penalties apply for shortfalls. Domestic value addition will be assessed and certified, with audits conducted regularly.
The Ministry reserves the right to modify guidelines, request information, and conduct inspections. Disputes will be settled by mutual discussion, with the Ministry’s Additional or Joint Secretary having the final say. Any violation results in the automatic invocation of the bank guarantee. To promote transparency and prevent corruption, applicants must submit an Integrity Pact undertaking with every application, committing to ethical behavior and disclosure of agents and payments.
