India adopts a new EV policy that will boost the entry of more global players
The government passed an electric vehicle (EV) policy on Friday, granting tariff rebates to firms establishing manufacturing plants in India with a minimum investment of Rs 4,150 crore or $500 million, to attract large global players like Tesla and Vinfast.
According to an official announcement, firms that establish production facilities for e-vehicles would be able to import a limited number of automobiles at a cheaper customs charge. The strategy aims to promote India as an EV manufacturing location and attract investment from well-known global EV firms.
The policy requires a minimum investment of Rs 4,150 crore (about USD 500 million), with no limit on the highest investment amount. Companies constructing manufacturing facilities for EVs would be given a three-year window to start up operations in India and begin producing EVs.
The policy stipulated that 25 percent of components were to be acquired domestically. Manufacturers will have a maximum of 5 years to achieve 50 percent domestic value addition (DVA), failing which the bank guarantee will be triggered.
In addition to the benefits for EV players who choose to establish a facility in India, the centre will enable restricted imports of automobiles at a cheaper customs rate.
Under the proposal, the total number of EVs authorized for import would be determined by the total tariff avoided or investment made, whichever is less, up to a maximum of Rs 6,484 crore. This is identical to the reward under the PLI system.
This policy would allow for the import of no more than 8,000 EVs per year, with the ability to carry over unutilized yearly import restrictions.
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