The government is developing detailed guidelines for companies interested in investing in the electric vehicle (EV) policy, and an official mentioned that a second round of consultation with stakeholders will take place soon. The Ministry of Heavy Industries has already conducted the initial round of consultations last month.
The guidelines will contain details regarding applications, links to portals, and the project monitoring agency (PMA), as stated by the official.
The official also explained that automotive companies in India have the option to apply for incentives under the policy by committing to the necessary investments.
“They can apply under the new policy for an import license for a certain number of EVs, and in order to qualify, they will have to commit to us the investments,” the official said.
Companies that are already operating in India do not have to create a new subsidiary in order to apply under the policy.
On March 15, the government approved an electric-vehicle policy. Under this policy, duty concessions will be provided to companies that establish manufacturing units in the country with a minimum investment of USD 500 million. This initiative is designed to attract major global players such as US-based Tesla.
According to the policy, a company has a three-year timeframe to establish manufacturing facilities in India, commence commercial production of e-vehicles, and achieve a 50% domestic value addition (DVA) within a maximum of five years.
The companies setting up manufacturing facilities for electric vehicle passenger cars will have the opportunity to import a restricted number of cars with a reduced customs/import duty of 15% on vehicles priced at USD 35,000 and higher for a period of five years from the government’s approval letter issuance.
Further, applications of auto companies from countries that are sharing a land border with India “will have to go through the much more onerous scrutiny’.
Applications from certain countries require government approval for investments in India.
Currently, vehicles that are imported as fully assembled units (CBUs) are subject to customs duties ranging from 70% to 100%. The duty amount varies based on the engine size and the total cost, insurance, and freight (CIF) value, whether it is below or above USD 40,000.
The policy aims to encourage India to become a hub for manufacturing electric vehicles and to attract investments from well-known global electric vehicle manufacturers.
According to the scheme, the company will have the permission to bring in completely built units of e-4W that they have manufactured at a lower customs duty rate of 15%, with certain conditions to be met.
EV passenger cars can be imported under this scheme initially with a minimum CIF value of USD 35,000 at a duty rate of 15% for five years starting from the approval letter issuance by the ministry of heavy industries.
The maximum number of electric 4-wheelers allowed to be imported at the reduced duty rate will be limited to 8,000 per year. Carrying over unused annual import limits would be allowed.
