In a groundbreaking move aimed at propelling India as a global manufacturing hub, the government has greenlit the E-Vehicle policy on March 15, as announced by the Commerce and Industry Ministry. This strategic initiative seeks to position India at the forefront of Electric Vehicle (EV) production, attracting substantial investments from renowned global manufacturers in the process.
Under the provisions of this policy, companies are mandated to invest a minimum of $500 million or ₹4,150 crore, unlocking a plethora of duty concessions. This bold step not only fosters technological advancements but also bolsters the ‘Make in India’ initiative, fortifying the EV ecosystem and fostering healthy competition among industry players.
By promoting high-volume production, economies of scale, and reducing import dependency on crude oil, the policy aims to curtail trade deficits while mitigating air pollution, particularly in urban areas. Such measures are poised to have a far-reaching positive impact on public health and the environment.
In a significant move to incentivize local manufacturing, the Centre has announced reduced import duties on EVs priced at $35,000 or higher. Automakers willing to invest $500 million in India over the next three years can benefit from this concession, provided they embark on local manufacturing operations and ensure a 50% domestic value addition in their vehicles within the stipulated timeframe.
Notably, the administration of this pioneering scheme falls under the purview of the Ministry of Heavy Industries (MHI), signaling the government’s unwavering commitment to driving sustainable industrial growth.
Tesla, a key player eyeing the Indian market, stands to benefit from these policy reforms. While negotiations initially revolved around a reduced duty threshold for its anticipated $25,000 EV, the company is now poised to introduce its Model 3, priced close to $40,000 globally, to the Indian market. Embracing localization efforts, Tesla aims to kickstart its Indian operations, marking a pivotal moment in its entry into the burgeoning Indian EV landscape.
The approval of the E-Vehicle policy underscores India’s resolute commitment to fostering innovation, sustainable development, and economic resilience. With transformative measures in place, India is poised to emerge as a beacon of progress in the global EV arena, propelling the nation towards a cleaner, greener, and more prosperous future.
