“India’s new EV policy slashes import duties to 15% for electric vehicles priced above $35,000, incentivizing global automakers to invest ₹4,150 crore in local manufacturing. The SPMEPCI scheme, launched in June 2025, aims to boost India’s EV ecosystem, create jobs, and support net-zero goals, with applications open until October 21, 2025.”
New EV Policy Opens Doors for Global Automakers with Duty Cuts
India’s Scheme to Promote Manufacturing of Electric Passenger Cars (SPMEPCI), launched on June 24, 2025, by the Ministry of Heavy Industries, marks a significant push to position India as a global hub for electric vehicle (EV) manufacturing. The policy allows global automakers to import up to 8,000 completely built-up (CBU) electric vehicles annually, priced at a minimum Cost, Insurance, and Freight (CIF) value of $35,000 (approximately ₹30 lakh), at a reduced customs duty of 15% for five years. This is a steep reduction from the standard 70-110% duty, designed to attract major players like Hyundai, Kia, Mercedes-Benz, Skoda, and Volkswagen, who have already expressed interest.
To qualify, companies must commit to a minimum investment of ₹4,150 crore (around $500 million) within three years to establish manufacturing facilities in India. The policy mandates progressive domestic value addition (DVA), requiring 25% local sourcing by the third year and 50% by the fifth year. Eligible firms must also meet stringent financial criteria, including a global automotive manufacturing revenue of at least ₹10,000 crore and fixed assets worth ₹3,000 crore. Investments can include research and development, machinery, and up to 5% for EV charging infrastructure, with land and building costs capped at 10%.
The scheme, initially notified on March 15, 2024, and detailed in June 2025, also allows brownfield projects, enabling existing manufacturers to participate if new investments are clearly separated from prior facilities. Companies must secure their commitment with an irrevocable bank guarantee equivalent to the forgone customs duty or ₹4,150 crore, whichever is higher, to ensure compliance. The total duty concession is capped at ₹6,484 crore or the actual investment, whichever is lower, with unused import quotas carried forward to the next year.
Union Minister H.D. Kumaraswamy, during the portal launch, emphasized the scheme’s alignment with India’s net-zero emissions goal by 2070 and the Make in India initiative. The policy is expected to drive technology transfer, job creation, and economic growth while fostering a competitive EV market. However, companies from countries sharing land borders with India, like China, face restrictions, impacting players like BYD. Vietnamese automaker VinFast, already investing $500 million in Tamil Nadu, may need additional investment to qualify.
Domestic manufacturers like Tata Motors and Mahindra have expressed concerns about increased competition, but amendments allowing brownfield investments address some of their apprehensions. The policy ensures mainstream EVs priced below ₹30 lakh, such as Tata’s Nexon EV and Mahindra’s XEV 9e, remain protected from low-cost imports, balancing foreign investment with local industry growth.
The application portal, live since June 24, 2025, accepts submissions until October 21, 2025, with a possible extension to March 15, 2026, based on demand. A non-refundable application fee of ₹5,00,000 is required. The scheme’s focus on localization and investment aims to reduce India’s reliance on imported EVs, which accounted for less than 15% of sales in 2024, while strengthening domestic production, currently dominated by local OEMs with over 80% market share.
Disclaimer: This article is based on recent news reports and official statements from the Ministry of Heavy Industries. Information is sourced from credible outlets like Times of India, Autocar India, and Business Standard. Allindiapress.com does not independently verify the data and advises readers to consult official government portals for the latest updates.