India Opens Portal for SPMPCI -An Electric Car Manufacturing Scheme

The Government of India has officially launched the application portal for its flagship electric mobility initiative, the Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMPCI).

The scheme aims to attract global and domestic auto manufacturers to invest in EV production facilities in India while allowing limited imports of high-end electric cars at a concessional customs duty.

Window Open Till October 21

As of June 25, companies can apply through the newly launched online portal to participate in the scheme. The portal will remain open until October 21, 2025, giving Original Equipment Manufacturers (OEMs) a four-month window to submit proposals.

 

The programme offers a significant reduction in customs duty, from the standard 70 to 110 percent down to 15 percent, on imported electric cars. It is mandatory that they meet certain value and investment thresholds. This duty relaxation is valid for a period of five years.

All About SPMPCI

To qualify for the benefits under the scheme, carmakers must commit a minimum investment of INR 4,150 crore to establish electric vehicle manufacturing facilities within India. Additionally, they must begin commercial production within three years of approval.

Only electric cars with a Cost, Insurance, and Freight (CIF) value of at least USD 35,000 per unit will be eligible for import under this scheme. The total volume of imports permitted is capped at 8,000 units annually, including any rollovers from previous years.

Domestic Value Addition and Compliance

A key condition of the scheme is the requirement for local value addition. Accordingly, manufacturers must achieve 25 percent domestic value addition within three years, increasing to 50 percent by the end of the fifth year.

To ensure compliance, participating companies will be required to furnish a bank guarantee equivalent to the total customs duty benefit availed. This guarantee will be forfeited if the investment or value addition obligations are not fulfilled. The guarantee must be unconditional and issued by a scheduled commercial bank in India.

Wider Scope for Investment Activities

The scheme’s latest guidelines also expand the scope of eligible investments. In addition to greenfield projects, brownfield expansions will now be considered, provided they have clear physical separation from existing facilities.

Investments in research and development (R&D) and EV charging infrastructure are now also eligible. While there’s no cap on R&D spending within the overall investment commitment, spending on charging infrastructure will be recognised only up to 5 percent of the total investment.

The SPMPCI scheme is part of India’s broader push to localise EV production and reduce import dependency, while encouraging clean transportation technologies. Emerging and developing economies in Asia (excluding China) saw a large increase in electric car sales, reaching almost 400,000 in 2024, up over 40 percent from 2023. However, in India, total electric car sales and their share of sales increased only slightly, approaching 100,000 (or 2 percent in 2024. This calls for more robust policy measures and the SPMPCI is a promising step in the direction.