India has just announced a revolutionary policy that could transform the country’s electric vehicle landscape. The Government has introduced the Scheme for Promoting the Manufacturing of Electric Passenger Cars in India (SPMEPCI), which dramatically reduces EV import duties on electric cars from a whopping 110% to just 15%. But here is the catch! Some important conditions need to be attached to these.
What Does This Mean For Electric Car Buyers?
Imagine paying double the price for an imported electric car due to heavy taxes. That’s exactly what was happening with the previous 110% EV import duty. Now, with the new 15% rate, a premium electric vehicle could become significantly more affordable for Indian consumers.
However, this benefit is not available for all electric cars. The reduced EV import duty only applies to EVs priced above ₹30 lakh. This strategic move protects existing Indian manufacturers while attracting global players to set up manufacturing facilities in the country.
The Big Investment Commitment
A car manufacturer can’t simply enjoy these benefits without giving something back to India. To qualify for the reduced import duty, companies must make a substantial commitment of USD 500 million (around ₹4150 crore) within 3 years. This investment must be fresh capital; companies cannot count their previous investments towards this requirement.
Think of it as a partnership deal. India offers attractive EV import rates, and in return, manufacturers promise to build cars locally and create jobs.
Progressive Manufacturing Requirements
The scheme follows a smart approach by setting progressive targets. Here is how it works in full:
Investment timeline:
- Companies get 5 years to access reduced import duty benefits.
- They must invest ₹4150 crore within the first three years.
Revenue milestones:
- Second year: ₹2500 crore annual turnover
- Fourth year: ₹5000 crore annual turnover
- Fifth year: ₹7500 crore annual turnover
Localisation targets:
- By the third year: 25% local value addition
- By the fifth year: 50% local value addition
This gradual increase ensures manufacturers genuinely commit to Indian manufacturing rather than just importing completely built vehicles.
Protecting Local Players
The government has been careful to protect existing Indian manufacturers like Mahindra, Tata, MG, and Hyundai. Popular models such as the Mahindra XEV 9e, Tata Nexon EV, Pan EV, MG Windsor, and Hyundai Creta Electric will continue competing on a level.
The ₹30 lakh minimum price threshold ensures that mainstream electric cars remain protected from unfair competition or dumping practices.
Annual Limits And Safeguards
To prevent misuse, the scheme includes several safeguards:
- A maximum of 8000 units per year can benefit from the reduced duty
- Beyond this limit, the standard 110% duty applies
- Total savings cannot exceed ₹6484 crore or the actual investment, whichever is lower
- Unused annual quotas can be carried forward to the next year
What Slash In EV Import Duty Means For India’s EV Future?
This EV import duty slash could attract major global electric car manufacturers to establish production facilities in India. Companies like Tesla, BMW, Mercedes-Benz, and others might find it attractive to manufacture locally rather than import.
For consumers, this means access to premium electric vehicles at more reasonable prices, while also supporting job creation and technology transfer in India.
The SPMEPCI represents India’s ambitious vision to become a global hub for electric vehicle manufacturing while ensuring the growth benefits reach local manufacturers and consumers.
Follow Us: Facebook | Instagram | X |
Youtube | Pinterest | Google News |
Entertales is on YouTube; click here to subscribe for the latest videos and updates.
