The Indian government has announced a new electric vehicle EV policy to attract global carmakers to invest in India. This new policy aims to promote local manufacturing, increase EV adoption, and support the country’s green mobility goals.
Key Highlights of the New EV Policy
1. Reduced Import Duty for EVs
Under the new policy, companies will be allowed to import electric vehicles priced at 35000 US dollars or more at a reduced import duty of just 15 percent. This lower duty will be valid for five years.
2. Mandatory Investment in India
To get the benefit of the reduced duty, companies must commit to investing at least 486 million US dollars in India. This investment must be used to set up manufacturing facilities for electric cars.
3. Import Limit of 8000 EVs Per Year
Approved companies will be allowed to import a maximum of 8000 electric vehicles per year under this scheme. The vehicles must meet the required price condition.
4. Local Manufacturing Timeline
After receiving government approval, companies must follow this timeline
• Start production of EVs within 3 years
• Use at least 25 percent locally sourced materials in 3 years
• Increase local content to 50 percent in 5 years
5. What Counts Towards Investment
The required investment of 486 million US dollars can include spending on
• Building factories
• Buying machines and equipment
• Research and development
• Setting up charging infrastructure
However, only a limited portion of this spending will be considered under the investment requirement.
What This Means for India
• This policy is expected toBring leading global electric carmakers like Tesla to India
• Create new jobs through local manufacturing
• Make premium electric vehicles more available to Indian buyers
• Help reduce carbon emissions and fuel imports
Conclusion
India’s new electric vehicle policy is a smart strategy to combine foreign investment with domestic growth. By allowing cheaper imports only when companies invest and manufacture in India, the government is ensuring that global businesses also contribute to India’s economy. This marks a major step forward in building a strong and self-reliant electric vehicle industry in the country.
Update: Heavy Industries Minister HD Kumaraswamy has announced that India will soon open applications under its electric vehicle (EV) manufacturing policy. However, CNBC-TV18, citing PTI, reported that Tesla is unlikely to start manufacturing in India in the near future. Instead, the company is expected to begin its India operations by importing EVs, with no local manufacturing involved initially.
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