Government unveils landmark scheme to boost electric passenger car manufacturing in India

THEBUSINESSBYTES BUREAU

NEW DELHI, JUNE 2, 2025

In a decisive move toward a sustainable and self-reliant automotive future, the Government of India has formally issued the detailed guidelines for the “Scheme to Promote Manufacturing of Electric Passenger Cars in India” (SPMEPCI). This forward-looking initiative, launched under the dynamic leadership of Hon’ble Prime Minister Shri Narendra Modi, is strategically aligned with India’s national objective of achieving net zero emissions by 2070. It aims to advance green mobility, spur economic growth, generate employment, and reduce the country’s environmental footprint while establishing India as a premier global hub for electric vehicle (EV) manufacturing and innovation.

The Ministry of Heavy Industries (MHI) released the detailed scheme framework following its initial notification on March 15, 2024. In coordination, the Department of Revenue, Ministry of Finance, had also issued a notification on the same date outlining reduced customs duties as per the scheme’s provisions. A separate notice inviting applications from prospective manufacturers is expected to be announced shortly, enabling online submission of proposals.

Addressing the press, Union Minister of Heavy Industries H.D. Kumaraswamy said, “Under the visionary leadership of Hon’ble Prime Minister Shri Narendra Modi, the Ministry of Heavy Industries has approved a forward-looking scheme to promote the domestic manufacture of passenger cars, with a special focus on electric vehicles. This landmark initiative aligns with India’s national goals of achieving Net Zero by 2070, fostering sustainable mobility, driving economic growth, and reducing environmental impact.”

The scheme provides a series of well-calibrated incentives to attract global investment. Approved applicants will be allowed to import Completely Built Units (CBUs) of electric four-wheelers with a minimum Cost, Insurance, and Freight (CIF) value of USD 35,000 at a significantly reduced customs duty rate of 15% for a period of five years from the date of application approval. To qualify, companies must commit to a minimum investment of ₹4,150 crore, ensuring that only serious and capable players participate in this transformation.

Furthermore, the scheme mandates domestic value addition (DVA) milestones, which are designed to foster local manufacturing capabilities and technology development. These provisions will help embed high-value manufacturing ecosystems within the country and significantly contribute to the Government’s ‘Make in India’ and ‘Aatmanirbhar Bharat’ campaigns.

By providing a robust and investor-friendly policy environment, the scheme aims to not only introduce cutting-edge EV technologies into the Indian market but also to ensure that these technologies are increasingly developed and produced domestically. It envisions a collaborative platform where global leaders and Indian enterprises come together to build the future of sustainable transportation.

With the launch of this transformative scheme, India is well on its way to becoming a key global destination for electric mobility innovation. The initiative promises to reshape the automotive landscape, offering cleaner transportation, technological leadership, and a greener, more prosperous tomorrow.