India’s Electric Vehicle Manufacturing Policy (SPMEPCI) offers 15% duty on 8,000 imported EVs/year if manufacturers invest ₹4,150Cr & achieve 50% localization in 5 years.
Policy At A Glance
📜 Scheme Name: SPMEPCI (Scheme to Promote Manufacturing of Electric Passenger Cars)
📅 Announced: March 15, 2024 | Guidelines released May 2024
💰 Min Investment: ₹4,150 crore (~$500M) per manufacturer
🚗 Import Concession: 15% duty (vs. 70-100%) on 8,000 CBUs/year (min $35,000 price)
Core Requirements
1. Investment & Localization
- Phase 1 (3 years): 25% local content
- Phase 2 (5 years): 50% local content (PLI Auto Scheme standards)
- Bank Guarantee: Equal to investment or duty forgone (whichever higher)
2. Financial Safeguards
- Duty benefit cap: ₹6,484 crore or actual investment (whichever lower)
- Charging infra limit: Max 5% of total investment
Eligibility Criteria
🏭 Global Revenue: ₹10,000 crore+
🏗️ Global Fixed Assets: ₹3,000 crore+
🌍 Target Companies: Established global automakers
Strategic Benefits for India
Market Transformation
🔌 EV Adoption: High-end models to enter Indian market
🏭 Local Manufacturing: Tesla-style “import-to-localize” model
🔋 Supply Chain Boost: 50% localization drives component ecosystem
Economic Impact
📈 Job Creation: Skilled manufacturing & R&D roles
💡 Tech Transfer: Advanced battery/EV tech localization
🌱 Sustainability: Supports India’s 2070 net-zero goal
Application Process
⌛ Window: 120 days from NIA release
💻 Mode: Online submissions via MHI portal
📋 Documentation: Global financials + detailed project plan
Industry Reactions
“This balances market access with manufacturing commitments – a win-win for India and global OEMs.”
– Auto Industry Analyst
“The bank guarantee ensures serious players only, preventing policy misuse.”
– Manufacturing Expert
Policy Challenges
⚠ High Entry Barrier: Excludes startups/new EV players
⚠ Premium Focus: $35K+ price point limits mass-market impact
⚠ Timeline Pressure: 5-year localization aggressive for complex tech
Global Context
🌐 Competition: Compared to Thailand/Indonesia’s EV incentives
🇮🇳 Differentiator: Combines import flexibility with strict localization
What’s Next?
🔹 Expected Applicants: Tesla, VinFast, legacy OEMs
🔹 First Approvals: Likely Q4 2024
🔹 Production Start: 2026-27 timeline
Policy text available on Ministry of Heavy Industries website. Land costs excluded from eligible investment. 🚗⚡
