Government approves E- Vehicle policy to promote India as a manufacturing destination for EVs

The Union Government has approved a scheme to promote India as a manufacturing destination so that e-vehicles (EVs) with the latest technology can be manufactured in the country. The policy is designed to attract investments in the e-vehicle space by reputed global EV manufacturers.

This will provide Indian consumers with access to the latest technology, boost the Make in India initiative, and strengthen the EV ecosystem by promoting healthy competition among EV players leading to a high volume of production, economies of scale, lower cost of production, reduced imports of crude Oil, lower trade deficit, reduce air pollution, particularly in cities, and will have a positive impact on health and environment.

 

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The Minimum Investment required is Rs 4150 Cr ( approximately USD 500 Mn) and the Timeline for manufacturing is 3 years for setting up manufacturing facilities in India, commercial production of e-vehicles, and reaching 50% domestic value addition (DVA) within 5 years of at the maximum. The Domestic value addition (DVA) during manufacturing is a  localization level of 25% by the 3rd year and 50% by the 5th year will have to be achieved.

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The customs duty of 15% (as applicable to CKD units) would be applicable on vehicles of minimum CIF value of USD 35,000 and above for a total period of 5 years subject to the manufacturer setting up manufacturing facilities in India within 3 years. The Investment commitment made by the company will have to be backed up by a bank guarantee instead of the customs duty forgone

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