The Government of India has launched a new scheme to promote the manufacturing of electric vehicles (EV). Under this scheme, global electric car companies can now sell their vehicles in India with low import duty, provided they manufacture electric vehicles in the country. Union Heavy Industries Minister HD Kumaraswamy inaugurated the application portal for this scheme on Tuesday. This portal will remain open till October 21.
The minister said that the famous electric car company Tesla is showing interest only in opening showrooms and selling its vehicles in India. He said, “Tesla intends to open only showrooms. They want to sell their cars in India, but so far there has been no progress towards setting up a manufacturing unit.” At the same time, Mercedes-Benz has
What is the specialty of this scheme?
Under this scheme, automobile companies will have to invest Rs 4,150 crore. In return, they will be allowed to bring 8,000 electric cars at a reduced import duty of 15 per cent, which is much lower than the current 70-100 per cent duty. The companies will have to start their manufacturing unit in India within three years and achieve 25 per cent local value addition (DVA). This DVA will have to be increased to 50 per cent within five years.
Heavy Industries Ministry Secretary Kamran Rizvi said that the ministry is writing letters to automobile companies and their embassies of countries like Germany, America, Britain and Czechoslovakia to participate in this scheme. However, investment restrictions applicable to border countries like Pakistan and China will remain intact.
Companies applying in this scheme will have to fulfill the condition of global income of Rs 10,000 crore and investment in fixed assets of Rs 3,000 crore. Also, a non-refundable application fee of Rs 5 lakh will have to be paid. The investment will include new machinery, equipment, and engineering research and development (ER&D), but the cost of land will not be counted. Up to 5 per cent of the cost on charging infrastructure and up to 10 per cent on new buildings will be included in the investment.
The ministry said that 4-5 auto companies have shown initial interest in this scheme. The application process can be reopened if needed till March 15, 2026. The limit of duty exemption under the scheme will be up to Rs 6,484 crore.