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The Government of India has taken a historic step to promote domestic manufacturing of electric vehicles (EVs) by announcing an ambitious new policy. Crafted under the visionary leadership of Prime Minister Narendra Modi, the initiative aims not only to help India achieve its net-zero emissions target by 2070 but also to transform the country into a global automotive manufacturing powerhouse.
What Is the Objective of the Policy?
This policy is more than just a regulatory measure—it is a strategic roadmap for revolutionizing India’s automotive sector.
1 Transforming India into a Global EV Manufacturing Hub:
The goal is to make India not just a consumer of EVs but a producer and exporter. The policy encourages foreign companies to set up plants in India, boosting exports and enhancing R&D and technological development within the country. India aspires to rival economies like China, the USA, and Germany in the automotive space.
2 Attracting Foreign Investment:
To lure global players such as Tesla, the government is offering steep reductions in import duties on a limited number of EVs. This move is expected to drive Foreign Direct Investment (FDI), leading to joint ventures and partnerships between global brands and Indian firms.
3 Bringing Cutting-edge EV Technology to India:
When global companies enter the Indian market, they bring advanced technologies such as battery management systems, power electronics, autonomous driving features, and energy-efficient systems—offering a new direction for India’s engineering and innovation sectors.
4 Generating Massive Employment Opportunities:
The EV industry will create a significant number of direct and indirect jobs—ranging from technicians, engineers, and plant operators to professionals in supply chain, customer support, charging infrastructure, EV services, and maintenance.
5 Boosting 'Make in India' and 'Aatmanirbhar Bharat' Campaigns:
The policy mandates Domestic Value Addition (DVA), ensuring most components are manufactured locally. This emphasis on in-country R&D, design, and production will reinforce India's self-reliance, strengthen its economy, and reduce import dependency.
Key Highlights of the Policy
To attract global EV manufacturers, the policy incorporates several investor-friendly provisions, the most prominent being import duty concessions:
1 Reduced Import Duty on EVs
Under the current norms, Completely Built Unit (CBU) imports attract duties between 70% and 100%, making vehicles highly expensive. The new policy slashes this to 15%—subject to certain conditions:
- Applicable only to EVs priced at a minimum of $35,000 CIF
- Restricted to premium or mid-high-end vehicles to protect local manufacturers
- Maximum import quota: 8,000 vehicles annually
- Concession valid for 5 years, with unused quotas being transferable to subsequent years
2 Massive Investment Opportunities
The policy mandates a minimum investment of ₹4,150 crore by approved companies. This includes investment in:
- New manufacturing facilities
- Advanced machinery
- R&D centers
- Charging infrastructure
Additionally, companies can upgrade existing facilities (brownfield projects) if clearly demarcated. This flexibility encourages both new and existing players to participate.
3 Mandatory Bank Guarantee
To ensure accountability, companies must furnish a bank guarantee equivalent to either the total import duty exemption availed or ₹4,150 crore, whichever is higher. This must remain valid throughout the policy period and ensures:
- Companies fulfill investment, localization, and production commitments
- The government is protected against non-compliance
- Clear Domestic Value Addition (DVA) Targets
A cornerstone of the policy is its strict DVA requirement—companies must increasingly source components and services from within India. This:
- Strengthens the local manufacturing and supply ecosystem
- Promotes EV technology development and skill-building
- Supports "Make in India" and “Aatmanirbhar Bharat” goals
All DVA claims will be certified by government-authorized testing agencies to ensure transparency and quality.
Who Can Benefit from the Policy?
This initiative opens doors at multiple levels:
- Global EV manufacturers seeking to enter or expand in India
- Indian automotive companies looking to partner or form joint ventures with foreign brands
- Startups and MSMEs already active in or entering the EV space, including components, batteries, software, and supply chain services
These entities can collaborate, gain access to global technologies, and scale their operations—contributing to a self-reliant and robust EV ecosystem.
Application Process
The policy outlines a transparent and simplified application process:
- Application window will be opened soon
- All applications to be submitted online
- A non-refundable application fee of ₹5,00,000 is mandatory
- Deadline: 120 days or more, as specified in the official notice
- All details including eligibility, terms, and guidelines will be published on the Ministry of Heavy Industries website
Why Join This Policy?
India’s EV sector is on the cusp of exponential growth and is set to become one of the country’s largest emerging industries. By participating in this policy, companies can benefit from:
- Rapidly expanding EV market opportunities
- Policy clarity, government support, and structured incentives
- A stable, long-term business environment
- Strategic alignment with national missions like Make in India and clean mobility
- This is not just an investment—it's a chance to be part of India's green revolution.
Conclusion
This landmark policy is set to catapult India's EV industry to new heights. Whether you're already in the EV space or exploring an entry, this is a golden opportunity to engage, invest, and innovate. Be a part of India's green energy transition—now is the time to act.
