The Indian government has launched a new policy to promote Electric Vehicle (EV) manufacturing.
About the Policy:
- The policy is designed to boost EV manufacturing in India and position the country as a global hub for EV production.
- It aims to attract significant investments from global EV manufacturers and is in line with the “Make in India” initiative.
- The policy seeks to provide Indian consumers with advanced EV technology and improve the domestic EV ecosystem by increasing competition.
- It aims to promote high-volume production, achieve economies of scale, and lower production costs, which will help in reducing crude oil imports, the trade deficit, and air pollution.
Key Highlights of the Policy:
- Investment and Manufacturing: The policy stipulates a minimum investment requirement of Rs 4,150 crore ($500 million) for companies wishing to establish EV manufacturing units in India.
- These facilities must be set up within three years and must start EV production promptly.
- Domestic Value Addition (DVA): Manufacturers are required to achieve a 50% Domestic Value Addition within five years of commencement, with an interim target of 25% by the end of the third year.
- Customs and Import Duty Concessions: To support the local manufacturing of EVs, the policy offers a 15% customs duty concession on imported Completely Built Units (CBUs) of electric vehicles valued over $35,000.
- This concession is available for five years, provided the manufacturer establishes local production within three years.
- Import Limitations and Incentives: The policy introduces caps on duty benefits tied to the level of investment, allowing up to 40,000 EV imports at reduced rates based on an $800 million investment.
- Unused limits from this provision can be carried over to the next period.
- Bank Guarantee Requirement: A mandatory bank guarantee, equivalent to the customs duty saved, must be provided by the manufacturers.
- This guarantee will be invoked if the specified DVA and investment thresholds are not met.
Ref:Source
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