Fresh Investments Mandatory For Automakers To Avail Incentives Under India's New EV Scheme: MHI

New Delhi, May 21 (KNN) The Ministry of Heavy Industries has made it clear that automakers wishing to avail incentives under India's new electric vehicle (EV) policy will have to make fresh investments as per the new norms, on Monday.

Previous investments will not be considered eligible under the Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI) approved by the government on March 15, 2024.

A senior official from the ministry stated that this stance has already been conveyed to Vietnam's electric carmaker Vinfast, which had earlier announced plans to invest USD 500 million (Rs 4,000 crore) in Tamil Nadu over a five-year period. Vinfast has now decided to halt further investments until the scheme's guidelines are finalised.

The new EV policy aims to attract global automakers, including Tesla, to establish manufacturing operations in India. The first stakeholders' meeting was held in April and was attended by an advisor representing Tesla, The Asia Group (TAG).

To prepare draft guidelines, the ministry will hold a second round of consultations with stakeholders within the next couple of months. The official said, "We have got a lot of representations. We have studied them, so maybe in a month or two, we may have the second consultative meeting. The task before us is to issue guidelines."

Under the SPMEPCI, eligible firms can import electric vehicles at a reduced duty of 15 per cent on cars costing above USD 35,000, provided they invest a minimum of USD 500 million in greenfield EV manufacturing facilities in India. 

These facilities must be made operational within three years and achieve minimum domestic value addition targets of 25 per cent within three years and 50 per cent within five years.

The government plans to issue the draft guidelines through a consultative process, circulating them among potential applicants and holding further meetings. "We will make the draft guidelines and will circulate those amongst the possible applicants and again call a consultative meeting," the official explained.

The window for applications under the scheme will open on or after July 31 and remain open for at least 120 days. Automobile manufacturers applying for the scheme will be issued eligibility certificates, and investments in plant, machinery, charging infrastructure, and assets will qualify, while royalties on technology imports will not be considered.

(KNN Bureau)