India Opens EV Car Scheme Portal to Attract Global Manufacturers 🇮🇳

In order to encourage the production of electric passenger vehicles domestically, India has launched a new EV scheme portal that offers reduced import duties to both Indian and foreign automakers in return for local investment commitments. H.D. Kumaraswamy, the Union Minister of Heavy Industries, opened the portal, which will take applications until October 21, 2025.

Important Aspects of the EV Manufacturing Scheme:

Import Duty Reduction: Automakers can import up to 8,000 electric vehicles (EVs) at a reduced 15% import duty (current rates range from 70 to 100%) if they commit to investing at least ₹4,150 crore in local EV production.

Timeline for Implementation: Within three years of their approval, approved applicants under the EV manufacturing scheme must start up their manufacturing facilities. During these three years, they also have to attain a minimum of 25% Domestic Value Addition (DVA). The plan requires a 50% DVA increase within five years of starting operations in order to guarantee deeper localisation and sustained commitment.

Investment Eligibility Criteria: To be eligible, an automotive group must have a minimum global revenue of ₹10,000 crore and at least ₹3,000 crore in fixed asset investments, based on the latest audited financials.

What Counts as Eligible Investment?

New plant, machinery, equipment, and associated utilities are among the eligible investments under the program. Additionally covered are expenditures for engineering research and development (ER&D) initiatives. Furthermore, as long as they don’t account for more than 5% of the overall investment, investments in charging infrastructure are also eligible. Up to 10% of the total committed investment may be used for the construction of new buildings related to the plant and utilities. Expenses spent on purchasing land, however, are specifically not eligible.

Application and Compliance:

A non-refundable application fee of ₹5,00,000 is needed to apply for the program. Applicants must also provide a bank guarantee equal to ₹4,150 crore or the entire amount of duty to be waived, whichever is greater. As a financial safety net for fulfilling all commitments pertaining to Domestic Value Addition (DVA) claims and meeting operational deadlines, this bank guarantee guarantees compliance.

Flexibility in Window Opening:

Depending on industry demand and strategic necessity, the Ministry of Heavy Industries may decide to reopen the application window until March 15, 2026.

Ministerial Remarks & OEM Interest:

Four to five international automakers have expressed initial interest, but formal applications are still pending.Regarding Tesla, Minister Kumaraswamy explained that the company is primarily interested in establishing its showroom and retail presence rather than focusing on manufacturing capabilities. Mercedes-Benz’s reported opt-out was denied by the Minister, who pointed out that the company had already made large investments before the portal’s launch.

Worldwide Reach & Limitations:

To promote involvement, the Ministry is actively contacting international automakers such as Germany, the United States, the United Kingdom, and the Czech Republic. For businesses from countries that share borders, such as China and Pakistan, there are still limitations on investment.

So, The primary advantage of this scheme is that it lowers the financial barriers to entry for automakers into the Indian market by providing a 15% import duty on EVs in exchange for significant local investment. This encourages local manufacturing, technological advancement, and job creation in addition to helping businesses cut expenses. The program increases India’s appeal and competitiveness as a destination for international EV players by incorporating important sectors like R&D, equipment, and charging infrastructure under eligible investments.