In a major move to position India as a global hub for electric passenger car manufacturing, the Ministry of Heavy Industries has notified comprehensive guidelines under a newly launched EV manufacturing scheme. This government-backed initiative is designed to attract global electric vehicle (EV) manufacturers, ensure significant domestic investments, and support India’s long-term objective of net-zero emissions by 2070.

The scheme has been formulated with the strategic goal of boosting the domestic production ecosystem, enhancing technological capabilities, and promoting a sustainable transport environment. In doing so, the Indian government aims to support the pillars of the Make in India and Aatmanirbhar Bharat missions.

Key Features of the EV Manufacturing Scheme

One of the core highlights of the initiative is the allowance for approved global EV manufacturers to import Completely Built-in Units (CBUs) of electric four-wheelers at a reduced customs duty of 15% for a duration of five years. However, this incentive is tied to strict eligibility criteria and investment commitments.

The imported electric vehicles must have a minimum Cost, Insurance, and Freight (CIF) value of Rs. 29,89,036 (approximately US$ 35,000). This policy ensures that only premium and technologically advanced models are introduced initially, while encouraging local manufacturing to meet broader market demand in the future.

Investment Criteria and Eligibility

To qualify for participation in the scheme, applicants must commit a minimum investment of Rs. 4,150 crore (US$ 485.95 million). The investment must be made in India’s domestic manufacturing infrastructure, including expenditures on plant setup, machinery procurement, and R&D activities.

The government has mandated a minimum Domestic Value Addition (DVA) of 25% within three years and 50% within five years, reinforcing the goal of deep localization. Companies will also need to provide a bank guarantee equivalent to either the total customs duty foregone or Rs. 4,150 crore, whichever is higher, as a measure of their commitment and financial soundness.

Additionally, brownfield projects (existing production units) are eligible, but must clearly outline their new investment strategy aligned with the scheme’s objectives. Greenfield investments will require full disclosure and execution of infrastructure building from the ground up.

Eligibility Based on Financial Strength

The scheme sets a high bar for eligibility, seeking only serious and capable players. Interested applicants must demonstrate:

• A minimum global group revenue of Rs. 10,000 crore (US$ 1.17 billion) from automotive manufacturing.

• A minimum global investment of Rs. 3,000 crore (Rs. 351 million) in fixed assets, affirming long-term business stability and experience.

These requirements are designed to filter in financially robust firms with proven manufacturing excellence and ensure sustained engagement with India’s evolving EV ecosystem.

Application Timeline and Fees

The application window for the scheme will remain open for 120 days or more, giving interested companies ample time to evaluate and align their strategies with the Indian market. A non-refundable application fee of Rs. 5,00,000 (US$ 5,855) is applicable, underscoring the seriousness of the process and minimizing non-genuine entries.

The scheme is positioned not only as a policy-level intervention but as a transformational opportunity to build a strong and vibrant EV manufacturing base within the country. It emphasizes the development of technological capabilities, domestic supply chains, and employment opportunities, all while fostering sustainable mobility.

Strategic Alignment with National Goals

This notification follows India's broader agenda to decarbonize transport, improve air quality, and decrease dependence on fossil fuels. By attracting global players, India aims to replicate the success seen in sectors like smartphones and solar energy, where incentive-based schemes led to dramatic local production growth.

The initiative is also expected to have positive ripple effects across ancillary industries, including auto components, battery manufacturing, software and control systems, and EV charging infrastructure. It will accelerate technological collaborations between Indian and global players, ensuring knowledge transfer and innovation.

Benefits to Global and Domestic Automakers

For global OEMs, the scheme opens the door to tap into one of the world’s largest automotive markets, while benefiting from lower tariffs and the potential to scale manufacturing operations within India. For domestic players, this translates into partnership opportunities, joint ventures, and access to advanced EV technology.

As India marches forward in its journey to become a green mobility leader, this EV manufacturing scheme could become a game-changer, ensuring that the country is not just a market for EVs but also a production powerhouse.

Conclusion

India’s decision to notify detailed guidelines for this EV car manufacturing scheme marks a decisive step toward a cleaner and more self-reliant automotive future. The combination of reduced customs duty, stringent investment mandates, and localization targets creates a structured and transparent pathway for global EV manufacturers to invest and manufacture in India.

The scheme is not merely about numbers; it’s about creating a robust ecosystem that supports job creation, technological advancement, economic growth, and environmental responsibility. With the Press Information Bureau and the Ministry of Heavy Industries leading this charge, the foundation is now laid for India’s emergence as a global electric vehicle manufacturing hub in 2025 and beyond.

This EV manufacturing scheme update stands as a crucial part of India’s broader strategy to meet net-zero goals, support green energy transitions, and drive sustainable mobility solutions for the future.

The Upcoming IPOs in this week and coming weeks are Sacheerome Limited, Ganga Bath Fittings, Victory Electric Vehicles International, Wagons Learning.

The Current active IPO are 3B Films

Start your Stock Market Journey and Apply in IPO by Opening Free Demat Account in Choice Broking FinX.

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst.