Introduces incentives for Electronic Vehicles (EV) infrastructure development to boost FDI

On 15 March 2024, the Government of India approved the Scheme for Manufacturing of Electric Cars (SMEC), which offers concessional import duties to automakers that establish new greenfield electric vehicle manufacturing facilities. Therefore, benefits will not be extended retroactively to existing facilities or prior investments. The scheme allows manufacturers to initially import EVs at reduced import duties (15 per cent) up to 8,000 EVs annually for 5 years while they set up domestic production capabilities over a three-year period after receiving approval. Royalty payments made to overseas parent companies will not be considered eligible investments under this scheme. Beneficiaries must invest $500 million in setting up electric car manufacturing facilities and meet a minimum domestic value addition commitment of up to 50 per cent.

• Type:

  • Promotion and facilitation (Investment incentives)

• Industry:

  • Manufacturing (Manufacture of transport equipment)

• Sources:

  • government of India, New EV policy, https://invest.up.gov.in/wp-content/uploads/2024/05/EV-policy_210524.pdf, 15 Mar 2024
  • Government of India, Scheme to Promote Manufacturing of Electric Passenger Cars in India, https://heavyindustries.gov.in/scheme-promote-manufacturing-electric-passenger-cars-india-0, 15 Mar 2024
  • Government of India, Government approves E-Vehicle policy to Promote India as a Manufacturing Destination for e-vehicles, https://pib.gov.in/PressReleasePage.aspx?PRID=2014874, 15 Mar 2024