Revving up global interest, India tempts EV giants with steep import duty cuts if they invest ₹41.5 billion and start manufacturing on home soil with a new scheme.
India has launched a new scheme to attract global electric vehicle (EV) manufacturers by offering reduced import duties to companies committing to local production. The application portal, under the name of ‘Scheme to Promote Manufacturing of Electric Passenger Cars in India’ (SPMEPCI), is now open until 21 October 2025.
Union Heavy Industries Minister H.D. Kumaraswamy unveiled the online portal on 24 June, urging foreign automakers to invest in India’s EV sector. However, he stated that Tesla, for now, is only interested in selling its cars via showrooms, without plans to manufacture locally.
Another car-maker, Mercedes-Benz, though reportedly uninterested in the scheme, had already made substantial investments prior to the application window opening, Kumaraswamy clarified.
Under the scheme, eligible companies can import up to 8000 EVs at a reduced customs duty of 15%—significantly lower than the current 70–100%—if they pledge at least ₹41.5 billion towards domestic EV manufacturing. Operations must begin within three years of approval.
Furthermore, applicants must also meet local content requirements: 25% domestic value addition (DVA) within three years, increasing to 50% within five. Only capital expenditure on new plants, machinery, and R&D will be considered towards investment thresholds.
The ministry will accept applications until 2026 and reserves the right to reopen the portal. Countries with land-border restrictions, such as China and Pakistan, remain subject to investment limitations.
To qualify, companies must have global automotive revenues of at least ₹100 billion and fixed asset investments of ₹30 billion. Approved applicants must also submit a bank guarantee equal to the total duty foregone or ₹41.5 billion—whichever is higher.
“By mandating domestic value addition targets, the scheme will further boost the ‘Make in India’ and ‘Aatmanirbhar Bharat’ initiatives, while empowering both global and domestic companies to become active partners in India’s green mobility revolution,” mentioned the Ministry of Heavy Industries in a press release.
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