Govt opens portal for auto-makers to apply under electric car scheme

The Hindu

10 hours ago

Global electric vehicle (EV) giants can now apply for the scheme to promote manufacturing of electric passenger cars in India, which offers significantly lower import tax for automakers that pledge to invest in domestic electric vehicle production.
Union Heavy Industries Minister H D Kumaraswamy inaugurated the portal for accepting applications under the scheme, which will remain open till October 21. He reiterated that EV giant Tesla is only interested in opening showrooms in India to sell its cars, and not inclined towards setting up manufacturing facilities in the country.
"Their [Tesla's] interest is only to open the showroom. They want to sell their car in India. Other than that, actually, there is no further development about this," he said.
Responding to another question on reports quoting Mercedes-Benz officials saying that it was not interested in investing in the scheme, Kumaraswamy said the luxury car-maker has already invested "in a big way" before the opening of the application window on Tuesday.
Officials explained that under the scheme, eligible investment must be capitalised in the books of account of the applicant "after the date of approval", therefore, equipment and machinery "must be put to use after becoming an approved applicant".
The Minister shared that 4-5 auto firms have shown preliminary interest in the scheme, however, it remains to be seen how many companies actually apply for it, as the portal has been opened from Tuesday.
Further, the Ministry of Heavy Industries shall have the right to open the application window, as and when required till March 15, 2026.
Secretary in the Heavy Industries Ministry Kamran Rizvi said original equipment manufacturers (OEMs) applying under the scheme and availing lower import tax will have to roll out a car with at least 25 per cent domestic value addition (DVA) within three years time, and increase the DVA to 50 per cent within five years.
He said the heavy industries ministry is writing to all countries having automotive majors, including Germany, the US, the UK, Czechoslovakia, and their embassies for encouraging participation under the scheme.
However, he said, the investment restrictions in India applicable to land border sharing countries like Pakistan and China, among others, shall remain in place.
Automakers will be permitted to import up to 8,000 EVs at a reduced duty rate of 15 per cent, compared to the current 70-100 per cent, provided they commit to investing Rs 4,150 crore in local EV manufacturing, according to the new EV policy notified by the government.
They will be required to begin operations at their manufacturing facilities in India within three years of receiving approval and must meet specified local content requirements, according to the notified guidelines under the Scheme to Promote Manufacturing of Electric Passenger Cars in India.
The scheme was notified on March 15 last year by the heavy industries ministry.
The maximum duty foregone per applicant has been capped at Rs 6,484 crore on the investment made under the scheme.
The applicant is required to set up a manufacturing facility and commence operations for manufacturing of eligible products -- e-4W within a period of three years from application approval date.
Expenditure incurred on new plant, machinery, equipment and associated utilities, engineering research and development (ER&D) will be eligible for availing investment-linked benefits under the scheme.
However, expenditure on land will not be considered, although new buildings of the main plant and utilities will be considered as part of the investment, provided it does not exceed 10 per cent of committed investment.
The expenditure incurred on charging infrastructure would be considered up to 5 per cent of the committed investment.
The applicant's commitment to set up manufacturing facilities, achievement of DVA and compliance with conditions stipulated under the scheme shall be backed by a bank guarantee from a scheduled commercial bank in India, equivalent to the total duty to be foregone, or ₹4,150 crore, whichever is higher.
A non-refundable application fee of ₹5,00,000 will be payable by the applicant while filing the application form.
To qualify and receive benefits under the scheme, an applicant is required to have a global group revenue from automotive manufacturing of a ₹10,000 crore.
Moreover, the global investment of a company or its group companies in fixed assets must be at least Rs 3,000 crore, based on the latest audited annual financial statements at the time of filing the application.