Government Releases Guidelines for Scheme To Promote Manufacturing of Electric Cars in India

Mumbai | June 2, 2025 – The Government of India has released comprehensive guidelines for the newly launched “Scheme to Promote Manufacturing of Electric Passenger Cars in India” (SPMEPCI), designed to attract foreign investments, push green mobility, and transform India into a leading electric vehicle (EV) manufacturing destination.

Minimum Investment Requirement

To qualify under the scheme, global EV manufacturers must invest at least ₹4,150 crore (approx. USD 500 million) within a 3-year timeframe. While there is no upper limit on investment, only firms meeting this threshold can apply.

Customs Duty Concessions

Approved companies can import EVs as completely built units (CBUs) valued at a minimum of USD 35,000 at a reduced customs duty rate of 15% for five years. Annual imports are limited to 8,000 units, with unused quota carried over. The maximum duty foregone per applicant is capped at the lower of ₹6,484 crore or the committed investment amount.

Domestic Manufacturing Milestones

Applicants must begin EV production in India within three years of approval. They are required to achieve 25% Domestic Value Addition (DVA) within three years, ramping up to 50% within five years.

Eligible Expenditure and Infrastructure

Eligible expenses include capital outlays on new plants, machinery, and R&D. While land costs are excluded, buildings (up to 10% of project cost) and charging infrastructure (up to 5%) are allowed.

Bank Guarantee Clause

A bank guarantee equal to the greater of ₹4,150 crore or the total customs duty foregone must be submitted, valid for the scheme’s full duration.

Application Window and Criteria

The Ministry of Heavy Industries (MHI) will open an online application window for 120 days, extendable up to March 15, 2026. A non-refundable application fee of ₹5 lakh is required.

Eligibility includes:

• Minimum global automotive revenue of ₹10,000 crore
• Minimum global fixed asset investment of ₹3,000 crore

Government’s Vision

Union Minister H.D. Kumaraswamy called the scheme “a critical step towards India’s 2070 net-zero goal,” highlighting its potential to fuel economic growth, EV innovation, and sustainable transport under the ‘Make in India’ and ‘Aatmanirbhar Bharat’ frameworks.

Industry Outlook

Experts see SPMEPCI as a pivotal policy shaping India’s EV trajectory, offering manufacturers a clear, incentivised route into a rapidly expanding market, while encouraging local production and innovation.

REF: https://www.pib.gov.in/PressReleaseIframePage.aspx?PRID=2133258

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