The Government of India has issued official guidelines to promote the manufacturing of electric passenger cars in the country. The move aims to make India a global hub for electric vehicle production while supporting clean mobility, economic growth, and environmental sustainability.
The guidelines have been released by the Ministry of Heavy Industries under the Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI). The scheme is designed to attract major global and domestic automobile companies to invest in India’s electric vehicle ecosystem.
Under the scheme, companies must commit a minimum investment of ₹4,150 crore to set up electric passenger car manufacturing facilities in India. In return, approved applicants will be allowed to import a limited number of fully built electric four-wheelers at a reduced customs duty of 15 per cent for up to five years. This provision is intended to support companies during the early stages of establishing local production.
The import benefit applies only to electric vehicles with a minimum cost, insurance and freight value of US$ 35,000 per unit. Imports are capped at 8,000 vehicles per year, and the total customs duty benefit will be limited to the value of the committed investment or the actual duty foregone, whichever is lower.
To strengthen domestic manufacturing, the scheme includes clear localisation targets. Participating companies must achieve 25 per cent domestic value addition within three years and 50 per cent within five years. This requirement ensures that manufacturing, sourcing, and job creation take place within India.
The scheme also sets financial eligibility criteria. Applicants must have a minimum global automotive revenue of ₹10,000 crore and global fixed assets worth at least ₹3,000 crore. Companies must submit a bank guarantee equal to the higher of the duty benefit availed or ₹4,150 crore to ensure compliance with investment and localisation commitments.
The government will open an online application window for eligible companies, which will remain open for at least 120 days and may be extended until March 15, 2026. A non-refundable application fee of ₹5 lakh will be charged.The initiative supports India’s long-term goals of reducing emissions, lowering dependence on fossil fuels, and strengthening domestic manufacturing. It also aligns with the broader vision of Make in India and Aatmanirbhar Bharat, positioning India as a key player in the global electric vehicle market.
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