India’s Ministry of Heavy Industries has unveiled detailed guidelines for the Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI). This landmark policy aims to attract major foreign investments and boost domestic EV production. It offers significant import duty concessions to global automakers that meet strict investment and localization benchmarks.
Key Highlights of the SPMEPCI Scheme
Minimum Investment and Eligibility
- Automakers must invest at least ₹4,150 crore (~$500 million) within three years of approval to qualify.
- Applicants must show global automotive manufacturing revenue above ₹10,000 crore and fixed assets worth ₹3,000 crore or more.
- The scheme targets established domestic and international players, excluding startups.
Import Duty Relief
- Qualified companies can import fully built electric cars (CBUs) with a minimum CIF value of $35,000 at a reduced customs duty of 15% (down from 70–100%) for up to five years.
- Each company can import 8,000 EVs annually, with unused quotas carried over to subsequent years.
- Total duty savings are capped at ₹6,484 crore or the actual investment—whichever is lower.
Localization and Manufacturing Requirements
- Companies must begin local manufacturing within three years of getting approval.
- They must meet Domestic Value Addition (DVA) targets:
- 25% within the first three years
- 50% within five years
- Government-approved agencies will certify DVA levels using protocols from the PLI Auto Scheme.
- Eligible investments include new manufacturing units, R&D centers, machinery, and equipment.
- Land costs are excluded.
- Buildings (up to 10%) and charging infrastructure (up to 5%) count toward the investment.
Safeguards and Compliance
- Companies must furnish a bank guarantee equal to the higher of ₹4,150 crore or the total duty exemption claimed.
- This guarantee remains valid for the full five-year duration of the scheme.
- Authorities will forfeit the guarantee if companies fail to meet investment or DVA targets.
Application Process and Timeline
- The Ministry will open an online application window for 120 days, extendable until March 15, 2026.
- Each applicant must pay a non-refundable fee of ₹5 lakh.
- Authorities will review applications using the same procedures followed in the PLI automotive scheme, ensuring fairness and transparency.
Policy Context and Industry Impact
India’s new scheme is a focused evolution of existing automotive policies. It specifically promotes electric passenger cars, intending to turn India into a global EV manufacturing hub.
The strategy strikes a balance. On one hand, it allows global brands to test the Indian market through limited imports. On the other, it pushes them to build local capacity and transfer EV technologies.
By tying incentives to measurable progress, the policy supports:
- Local supply chain development
- Creation of green jobs
- Achievement of India’s net-zero targets
Notably, the scheme is expected to draw interest from global players like Tesla, VinFast, Mercedes-Benz, Volkswagen, Hyundai, and Kia.
Outlook
India’s EV manufacturing policy could reshape the country’s automotive landscape. It makes market entry easier for international automakers while reinforcing the government’s Make in India initiative. With strict compliance measures and phased localization goals, the policy ensures that both Indian consumers and the domestic industry gain lasting benefits.
