Govt Approves Scheme For Domestic Manufacturing Of EVs

The Union government has approved a scheme to promote the domestic manufacturing of passenger cars, with a special focus on electric vehicles (EVs), the government said Friday.

Advertisment

The Ministry of Heavy Industries (MHI) issued a notification for the “Scheme to Promote Manufacturing of Electric Passenger Cars in India” (SPMEPCI) on March 15. The initiative aims to attract global EV manufacturers and strengthen India’s position as a hub for clean mobility, in line with the country's “Make in India” and “Aatmanirbhar Bharat” goals.

The Department of Revenue also notified reduced import duties for EVs on the same day, aligning with the scheme’s provisions. An official notice inviting applications is expected shortly. Applications will be accepted online for 120 days or more, with the window open until March 15, 2026. A non-refundable application fee of ₹500,000 will apply.

Min CIF Value 

Advertisment

Under the scheme, approved applicants will be allowed to import completely built electric four-wheelers (e-4Ws) with a minimum CIF value of USD 35,000 at a reduced customs duty rate of 15% for up to five years. The annual import quota is capped at 8,000 units, with carryover of unused limits permitted.

Total customs duty foregone will be limited to the lower of ₹6,484 crore or the actual investment made. Approved companies must invest a minimum of ₹4,150 crore in domestic manufacturing. Investments in new plant and equipment, R&D, and supporting infrastructure will be considered, but land costs are excluded. Building costs may be included up to 10% of the committed investment, while charging infrastructure can account for up to 5%.

DVA Targets 

To qualify, manufacturers must meet domestic value addition (DVA) targets. DVA will be certified by agencies approved by the MHI, and assessed per the Production Linked Incentive (PLI) scheme guidelines.

Applicants must also submit a bank guarantee equal to the greater of ₹4,150 crore or the total duty foregone. The guarantee must remain valid throughout the scheme period.

Union Minister H.D. Kumaraswamy said the scheme aims to position India as a global manufacturing base for electric vehicles. “Under the visionary leadership of Prime Minister Narendra Modi, this initiative supports our goal of achieving net zero by 2070, promoting economic growth, and reducing environmental impact,” he said.