Policy Overview
- Import Duty Reduced: EV manufacturers allowed to import up to 8,000 electric cars per year at 15% customs duty, down from 70-100%.
- Eligibility Criteria: Manufacturers must commit to investing ₹4,150 crore (~$500 million) in setting up domestic EV manufacturing units.
- Implementation Timeline: Approved companies must start operations within 3 years and meet local value addition norms.
- Duration: Concessional duty valid for 5 years from date of approval.
Relevance : GS 2(Governance ) , GS 3(Energy ,Technology)
Domestic Manufacturing Push
- Objective: Boost Make in India for EVs while attracting foreign investment.
- Companies can use either greenfield (new) or brownfield (existing) investments—a key change from earlier draft policy.
- Brownfield clause may added after lobbying from domestic players who concerned unfair competition.
Global Interest & Tesla’s Position
- Heavy Industries Minister H.D. Kumaraswamy noted that Tesla is not keen on manufacturing in India; more focused on setting up showrooms and sales.
- Policy possibly aimed at attracting other global EV players like BYD, Hyundai, or VW.
Key Features of the Scheme
- Car Price Minimum: Imported vehicles must have minimum CIF value of $35,000 to avoid dumping of low-cost imports.
- Cap on Imports: Limited to 8,000 units annually, ensuring domestic manufacturers are not overwhelmed.
- Localization Mandate: Gradual increase in domestic value addition over the years to ensure manufacturing ecosystem develops.
Implications for India
- Encourages technology transfer, job creation, and supply chain development.
- Potential to reduce import dependence in long term.
- Ensures controlled opening of Indian EV market while safeguarding domestic industry interests.
Challenges & Criticisms
- Risk of policy misuse if localization norms are not strictly enforced.
- Possible market distortion if foreign EVs dominate high-end segment.
- Domestic manufacturers may still face pressure to match global tech and quality.
