The Government of India has launched a forward-looking scheme to promote the domestic manufacture of passenger vehicles with a strong focus on electric vehicles (EVs). Approved under the leadership of Prime Minister Narendra Modi, the initiative aims to support India's target of achieving net zero emissions by 2070 while positioning the country as a global hub for EV manufacturing.

The “Scheme to Promote Manufacturing of Electric Passenger Cars in India” (SPMEPCI) was notified by the Ministry of Heavy Industries (MHI) on 15 March 2024, with detailed guidelines recently released. The scheme is designed to attract leading global manufacturers and strengthen India’s position as a centre for automotive innovation.

Key Provisions of the Scheme

·         Approved applicants must invest a minimum of Rs 4.15 billion in domestic EV manufacturing.

·         Qualified manufacturers will be permitted to import completely built-up electric four-wheelers (CBUs) with a minimum CIF value of USD 35,000 at a reduced 15 per cent customs duty for five years.

·         Annual import limits are capped at 8,000 vehicles, with unused quotas allowed to carry forward.

·         Total customs duty foregone per applicant is limited to the lower of Rs 64.84 billion or the committed investment amount.

Eligibility Requirements
Applicants must meet the following criteria:

·         Global revenue from automotive manufacturing of at least Rs 100 billion.

·         Global fixed asset investment of at least Rs 30 billion.

Applicants must also provide a bank guarantee equivalent to the higher of Rs 4.15 billion or the total duty foregone. This guarantee must remain valid throughout the scheme period.

Investment Guidelines
Eligible expenditure includes new plant and machinery, engineering R&D, and utilities, with buildings capped at 10 per cent and charging infrastructure at 5 per cent of the committed investment. Land cost is excluded.

Application Process
A 120-day application window will open soon, with a non-refundable fee of Rs 500,000. The scheme is open for applications until 15 March 2026, subject to periodic invitations by MHI.

Union Minister H.D. Kumaraswamy stated, “The scheme reflects our commitment to sustainable mobility and economic growth. It combines advanced technology integration with robust policy incentives to encourage both domestic and international participation in India's EV revolution.”

Certification of Domestic Value Addition (DVA) will follow the procedures laid out in the PLI Auto Scheme, with designated testing agencies certifying compliance.

With this initiative, the government expects to generate employment, enhance indigenous capabilities, and support the 'Make in India' and 'Aatmanirbhar Bharat' missions by promoting green mobility and long-term investments in EV manufacturing.