The SPMEPCI aims to attract investments from global EV manufacturers like Tesla and establish India as a global EV manufacturing hub.
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India is open to changing its electric vehicle (EV) policy – the Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI) – subject to final tariffs on imported cars as this scheme is based on customs duties.
However, it will be tweaked once the final tariff rates are decided under the bilateral trade agreement (BTA), government sources told businessline. The scheme was announced on March 15, 2024, but hasn’t taken off yet, as it is still in drafting the guidelines.
“We will cross the bridge when we get there…Whatever scheme is made, with the Ministry of Finance (Department of Revenue) and the concerned Ministry…government can always revise/ change the scheme and then come out with the notification. Hypothetically, we do not know at what tariff rate it will be fixed,” a senior government official said.
In final stages
The official also added that the scheme is in the final stages and the Ministry of Heavy Industries can notify it in two weeks. He added that what negotiations (BTA) will lead to what tariff rates, will be known at that point in time only.
The SPMEPCI aims to attract investments from global EV manufacturers like Tesla and establish India as a global EV manufacturing hub. According to the scheme, the manufacturers are required a minimum investment of $500 million (around ₹4,200 crore), domestic value addition (DVA) of minimum 25 per cent by the end of the third year (once the investment starts) and 50 per cent by the end of the fifth year.
Also, such EV companies can import their vehicles valued at $35,000 or more at a reduced customs duty of 15 per cent (from more than 100 per cent currently) for a period of five years, subject to meeting the minimum investment and DVA requirements.
Make in India push
The scheme aims to promote the ‘Make in India’ initiative and foster employment generation within the EV manufacturing ecosystem. The proposed scheme is also aligned with the production-linked incentive (PLI) scheme for automobiles and auto components.
According to government officials any foreign company can invest under this Scheme, except Chinese companies or any company from neighbouring countries, which comes under Press Note.3 of the government under the FDI policy.
According this, an entity of a country, which shares land border with India or where the beneficial owner of an investment into India is situated in or is a citizen of any such country, can invest only under the government route.
Published on April 24, 2025
