Govt’s new EV policy to boost make in India, attract global investors, ET EnergyWorld


New Delhi: The central government has rolled out the much-anticipated EV policy aiming to transform India into a hub for electric vehicle (EV) manufacturing, requiring a minimum investment of ₹4,150 crore (approximately $500 million). The initiative is set to pave the way for the latest EV technologies to be produced domestically, aligning with the ‘Make in India’ campaign and reducing the country’s reliance on crude oil imports.

Under this policy, there is no cap on the maximum investment, encouraging global EV manufacturers to invest heavily in the Indian market. The scheme stipulates a three-year timeline for setting up manufacturing facilities and mandates that commercial production of e-vehicles begin within this period, achieving a 50% domestic value addition (DVA) within five years at the maximum.

“To reach a localization level of 25% by the third year and 50% by the fifth year is mandatory,” the government outlined, emphasizing the importance of integrating domestic resources into the manufacturing process. The policy also specifies a customs duty of 15% on vehicles with a minimum CIF value of $35,000 for five years, provided the manufacturing setup is established in India within three years.

The government’s strategy includes incentives for investments over USD 800 million, allowing the import of up to 40,000 EVs at a rate of no more than 8,000 per year. This provision is contingent on the fulfillment of investment and DVA criteria, with the potential for unutilized annual import limits to be carried over.

An essential component of the scheme is the requirement for companies to back their investment commitments with a bank guarantee, which will be invoked if the DVA and minimum investment thresholds are not met. “The Bank guarantee will be invoked in case of non-achievement of DVA and minimum investment criteria defined under the scheme guidelines,” the policy asserted.

This ambitious policy not only aims to boost the Make in India initiative but also to fortify the EV ecosystem through healthy competition, leading to increased production volumes, economies of scale, and reduced production costs. Additionally, it is expected to significantly cut down on crude oil imports, lessen the trade deficit, and contribute to a reduction in air pollution, particularly in urban areas, ultimately having a positive impact on health and the environment.

“As India charges forward with the E-Vehicle Policy announced today, we are not just witnessing a shift in transportation; we are revolutionizing sustainable innovation. The focus on Make in India and Atmanirbhar Bharat in this new policy is expected to build a sustainable path towards a greener tomorrow. By embracing a circular economy model, we are moving towards minimizing environmental impact and maximizing resource efficiency,” said Nitin Gupta, CEO and Co-founder, Attero.

As global automotive giants roll out their plans, opportunities for economic growth and job creation will grow at a rapid pace in the manufacturing and recycling sectors. The growth of manufacturing units is set to catalyze the demand for ethical recycling capacities, ensuring that even as we progress, we do so with a conscience. With the new policy in place, the expected surge in demand for materials like copper, aluminium, cobalt and lithium will drive our commitment to embracing cleaner, greener technologies. In this journey towards a greener, cleaner future, India stands at the forefront of innovation and sustainability with the new E-Vehicle Policy,” he added.

  • Published On Mar 15, 2024 at 07:35 PM IST

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