Latest news with #SchemeforPromotionofManufacturingofElectricPassengerCarsinIndia
Time of India
5 days ago
- Automotive
- Time of India
As Tesla snubs overtures, govt opens lower duty regime to brownfield investments in EV manufacturing
Now that it is abundantly clear that Elon Musk is not keen to manufacture Tesla electric cars in India, the government has finally released the guidelines of a policy aimed at attracting global OEMs to make electric passenger cars in India. The policy, called Scheme for Promotion of Manufacturing of Electric Passenger Cars in India (SPMEPCI), was notified in March last year but the guidelines (without which no applications seeking benefits under this policy could have been submitted) took nearly 15 months to be finalised. And though no official in the ministry of heavy industries admitted that the policy and subsequent guidelines were waiting for Tesla's green light, there had been enough indications that Tesla was indeed the principal intended beneficiary of this policy. The policy, SPMECPI, allows OEMs to avail a concessional import duty of 15per cent on CBU imports of high value cars, in lieu of a commitment to manufacturing and sourcing in India. Initially, the policy was only meant for foreign OEMs, but after vociferous protests from Indian manufacturers including Maruti Suzuki India, Tata Motors and others, brownfield investments have now also been included in the policy. This means any fresh investments - by foreign or local OEMs - in making electric passenger cars in India will be eligible for import duty sops. This requirement is designed to promote indigenous capabilities and reduce reliance on importsDhiraj Agrawal So will Vietnamese OEM Vinfast be eligible for concessional import duty regime for its investments in manufacturing in the country, which were mad before the policy guidelines were finalised? This remains to be seen. The guidelines issued today make it clear that for brownfield investments, there should be clear demarcation from any existing manufacturing facility. In other words, only new lines/manufacturing plants will be eligible under SPMECI. Also Read: VinFast eyes premium EV space in India, downplays competition with Tesla Here are the salient features of the policy guidelines: -Minimum Investment needed to qualify is ₹4150 crore, within three years of an OEMs' application having been approved. Investment areas include new plant, machinery, engineering R&D etc. Manufacturing must begin within three years. -Domestic Value Addition (DVA): Minimum DVA of 25per cent within three years and 50per cent within five years. The DVA criteria will be assessed as per the SOP issued under the Production Linked Incentive (PLI) Scheme for Automobile and Auto Component Industry. This move aims to attract long term capital, encourage technology transfer, and build a robust domestic EV ecosystemRohan Dewan -Import Duty Concessions: Import of Completely Built Units (CBUs) of e-4Ws with a minimum CIF (Cost, Insurance, and Freight) value of $35,000 will be allowed at a reduced customs duty of 15per cent , but only for 8,000 units per year for five years. -Eligibility: Applicants must have a minimum global group revenue (from automotive manufacturing) of ₹10,000 crore and a minimum global investment in fixed assets (gross block) of ₹3,000 crore. Also Read: VinFast India to inaugurate its Tamil Nadu factory on July 30 Policy could boost local sourcing: Dhiraj Agrawal, Chief Business Officer at Mufin Green Finance, said that to ensure the development of a robust local supply chain, SPMEPCI mandates that participating manufacturers achieve 25per cent domestic value addition within three years and 50per cent within five years. 'This requirement is designed to promote indigenous capabilities and reduce reliance on imports'. And Rohan Dewan, Co-Founder and CEO of LeafyBus, said that by reducing import duties to 15per cent for electric vehicles priced at $35,000 and above, 'the government is sending a clear signal to global EV manufacturers. The policy requires a minimum investment of 4,150 crore rupees, or approximately 500 million US dollars, to set up manufacturing facilities in India within three years. This move aims to attract long term capital, encourage technology transfer, and build a robust domestic EV ecosystem.' But another industry leader said that the SOPs have been drafted to primarily benefit foreign OEMs instead of helping local ones. For one, the high bar for entry - requiring global revenue of ₹10,000 crore from automotive manufacturing and a global investment in fixed assets of ₹3,000 crore can only be met by large, established international automotive players. It may make smaller local EV OEMs ineligible. Also, the import duty reduction is applicable only on high value CBUs and appears to be incentivising global OEMs to test market their high-end EV models in the Indian market. How will this incentivise local OEMs? One thing is sure. If the policy attracts any significant number of applications from global OEMs, local ones like Maruti, Mahindra & Mahindra, Tata and also local units of Hyundai Motor Co and Toyota etc will have to face increased competitive intensity.
New Indian Express
5 days ago
- Automotive
- New Indian Express
Tesla not interested in manufacturing in India; focussing on showrooms for now: HD Kumaraswamy
MUMBAI: Elon Musk's Tesla is not interested in manufacturing in India, and all they are looking at right now is to showrooms in India, the Minister of Heavy Industries HD Kumaraswamy said here on Monday after announcing the guidelines for Scheme for Promotion of Manufacturing of Electric Passenger Cars in India (SMEC). Though he said once the application window for SMEC policy opens, the real intent of the companies will be known. The SMEC policy which meant for attracting investment from global EV manufacturers will allow those players who apply under the scheme to import completely built units (CBUs) at a 15% import duty against the currently applicable rate of 70%. The government officials told TNIE that Tesla, which had initially shown interest in setting up manufacturing units in India, attended only the first stakeholders' consultation meetings to discuss the details of the scheme. After the first meeting, they skipped the subsequent meetings. It is to be noted that US president Donald Trump has very close links with Tesla promoter Elon Musk and the latter was part of the Trump administration till recently. When asked about Musk's plans to manufacture in India, Trump had commented it would be very unfair if Musk builds a factory in India. India and the US are negotiating a trade deal and it is said that India might agree to lower tariffs on imports of cars, which varies from 70-10%. Under the India-UK trade deal, which was concluded recently, India has agreed to reduce the tariff on cars to 10%. However, small EVs have been kept out of the purview of the deal.
Time of India
25-04-2025
- Automotive
- Time of India
Change on cards for EV manufacturing policy
India is open to modifying its electric car manufacturing policy to factor in possibly lower import tariffs under the India-US trade agreement. The Scheme for Promotion of Manufacturing of Electric Passenger Cars in India (SPMEPCI ) was announced in March 2024, but it is yet to be operationalised. SPMEPCI planned to offer discounted import tariffs to high-end EV companies committing investments in India. The scheme details have not been announced amidst lukewarm response from potential investors. "The guidelines could be launched in a few weeks," a senior official said while adding that a final nod from some ministries is awaited. These guidelines will spell out operational contours of the scheme, after which applications from EV companies can be invited. The incentives can be modified once the India-US bilateral trade agreement is finalised. SPMEPCI required applicants to invest at least ₹4,150 crore in EV manufacturing, offering in return a lower 15per cent duty for importing high-end electric cars. Beneficiaries also need to achieve a minimum domestic value addition (DVA) of 25per cent within three years, scaling up to 50per cent at the end of five years. But recent considerations to lower import duties on cars following pressure from US President Donald Trump threatens to render the scheme ineffective. Earlier this week, Elon Musk-led Tesla officials red-flagged India's import tariffs on cars as a major deterrent for their entry to the country. These comments were in the backdrop of India-US bilateral trade agreement (BTA) talks where import duties are a major flashpoint. Officials said India will tweak SPMEPCI if import duties on cars are lowered and incentives for local manufacturing need to be sweetened. India currently charges an import duty of up to 100per cent on cars to protect its domestic manufacturing industry. There are various levels of duties on auto components as well. Trump first announced but subsequently paused reciprocal tariffs to fire up domestic manufacturing in the US. He has repeatedly criticised India's high import tariffs on automobiles and others that make US exports uncompetitive.
Time of India
24-04-2025
- Automotive
- Time of India
Change on cards for EV manufacturing policy
India is considering modifying its electric car manufacturing policy (SPMEPCI) to accommodate potentially lower import tariffs under a future India-US trade agreement. The scheme, designed to attract EV investments with discounted import duties, faces uncertainty due to pressure from the US to reduce tariffs. Lowering import duties could necessitate adjustments to SPMEPCI to maintain its attractiveness for manufacturers. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads India is open to modifying its electric car manufacturing policy to factor in possibly lower import tariffs under the India-US trade agreement. The Scheme for Promotion of Manufacturing of Electric Passenger Cars in India (SPMEPCI) was announced in March 2024, but it is yet to be planned to offer discounted import tariffs to high-end EV companies committing investments in scheme details have not been announced amidst lukewarm response from potential investors. "The guidelines could be launched in a few weeks," a senior official said while adding that a final nod from some ministries is awaited. These guidelines will spell out operational contours of the scheme, after which applications from EV companies can be incentives can be modified once the India-US bilateral trade agreement is required applicants to invest at least ₹4,150 crore in EV manufacturing, offering in return a lower 15% duty for importing high-end electric cars. Beneficiaries also need to achieve a minimum domestic value addition (DVA) of 25% within three years, scaling up to 50% at the end of five recent considerations to lower import duties on cars following pressure from US President Donald Trump threatens to render the scheme ineffective. Earlier this week, Elon Musk-led Tesla officials red-flagged India's import tariffs on cars as a major deterrent for their entry to the comments were in the backdrop of India-US bilateral trade agreement (BTA) talks where import duties are a major flashpoint. Officials said India will tweak SPMEPCI if import duties on cars are lowered and incentives for local manufacturing need to be currently charges an import duty of up to 100% on cars to protect its domestic manufacturing industry. There are various levels of duties on auto components as well. Trump first announced but subsequently paused reciprocal tariffs to fire up domestic manufacturing in the US. He has repeatedly criticised India's high import tariffs on automobiles and others that make US exports uncompetitive.
