New Delhi: The Government of India on Friday approved a EV policy scheme to promote India as a manufacturing destination so that e-vehicles, with the latest technology, can be manufactured in the country.
The policy is designed to attract investments in the e-vehicle space by reputed global EV manufacturers.
In a statement, the ministry of Ministry of Heavy Industries said, “This will provide Indian consumers with access to latest technology, boost the Make in India initiative, strengthen the EV ecosystem by promoting healthy competition among EV players leading to high volume of production, economies of scale, lower cost of production, reduce imports of crude Oil, lower trade deficit, reduce air pollution, particularly in cities, and will have a positive impact on health and environment.”
The statement further listed out details of the policy.
- Minimum Investment required: Rs 4,150 crore (∼USD 500 Mn)
- No limit on maximum Investment
- Timeline for manufacturing: three years for setting up manufacturing facilities in India and to start commercial production of e-vehicles and reach 50 percent domestic value addition (DVA) within five years at the maximum.
- Domestic value addition (DVA) during manufacturing: A localization level of 25 percent by the third year and 50 percent by the fifth year will have to be achieved
- The customs duty of 15 percent (as applicable to CKD units) would be applicable for a period of five years
- Vehicle of CIF value of USD 35,000 or above will be permissible
- The total number of EV allowed for import would be determined by the total duty foregone or investment made, whichever is lower, subject to a maximum of Rs 6,484 crore (equal to incentive under PLI scheme).
- Not more than 8,000 EVs per year would be permissible for import under this scheme. The carryover of unutilized annual import limits would be permitted.
- The Investment commitment made by the company will have to be backed up by a bank guarantee in lieu of the custom duty forgone
- The Bank guarantee will be invoked in case of non-achievement of DVA and minimum investment criteria defined under the scheme guidelines.
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