Central EV Policy: The Indian Government has formally announced a far-reaching new policy initiative. To make the nation an international destination for the manufacture of electric vehicles. The Ministry of Heavy Industries (MHI) issued elaborate guidelines. The “Scheme to Promote Manufacturing of Electric Passenger Cars in India” (SPMEPCI) on June 2, 2025. After its preliminary announcement on March 15, 2024.
Central EV Policy: Major Highlights of the New Policy
Lower Import Tariffs for International Players
- Import Concession: Automakers can import a maximum of 8,000 new electric passenger cars annually. At a significantly lower custom duty of 15% (from the existing 70–100%). As long as every car costs a minimum of $35,000 (CIF).
- Validity: The lower duty will be valid for five years from the date of approval of application.
Strict Investment and Localization Conditions
- Minimum Investment: Firms are required to invest a minimum of ₹4,150 crore. In EV production units over three years.
- Localization Targets: Vehicle manufacturers will have to ensure at least 25% local value addition over three years and 50% by the fifth year.
- Eligibility: Global revenues of ₹10,000 crore and fixed asset investments. ₹3,000 crore are the requirements for applicants. Applications are to be submitted within 120 days, extendable to March 15, 2026.
Bank Guarantee and Application Fee
- Bank Guarantee: A bank guarantee of the amount of duty foregone or ₹4,150 crore, whichever is less.
- Application Fee: A meager payment of ₹5 lakh per application.
Unused Import Quotas
- Carry-Over: Unuse yearly import quotas may carry forward to the subsequent year.
Union Minister Shri H.D. Kumaraswamy underscored the alignment of the policy with India’s overall objectives. “This policy is a game-changer for the automotive sector of India. It is a push for sustainable mobility. The generation of quality jobs, and the positioning of India as an EV manufacturing hub for the world. The move is a manifestation of our vision for reaching net-zero by 2070. The bolstering of the ‘Make in India’ and ‘Aatmanirbhar Bharat’ visions.”
ELCTRIK Speaks
The new policy has the potential to create billions of jobs and billions of dollars in foreign investment. As well as expedite efforts towards building a strong domestic EV supply chain. With explicit goals for local value addition, the policy provides for the gains of EV adoption to be spread across the Indian economy.
