AMN / New Delhi, June 2
– In a major push to bolster electric vehicle (EV) manufacturing, the Government of India has finalized a new policy offering significant import duty concessions for global carmakers willing to invest in domestic production.
Announcing the scheme at a press briefing in the capital, Union Minister for Heavy Industries, H.D. Kumaraswamy, said the government will levy a reduced import duty of 15% on electric cars valued at $35,000 or more. However, this incentive is conditional upon the commitment of participating companies to invest in EV manufacturing facilities within India.
As per the notified guidelines, approved companies will need to commit a minimum investment of ₹4,150 crore under the scheme.
“The aim is to position India as a global hub for electric vehicle manufacturing while facilitating the entry of premium global brands,” the minister stated.
Leading automakers including Mercedes-Benz, Kia, Hyundai, and Skoda have already expressed interest in participating in the initiative. Regarding Tesla, Kumaraswamy noted that while the company has shown interest in setting up showrooms in India, it has not yet committed to manufacturing locally.
The scheme is expected to accelerate EV adoption, boost local production, and contribute to India’s broader clean mobility goals.
Custom Dutybenefits:
- The approved Applicants will be allowed to import CBUs of e-4W manufactured by global Group Companies with a minimum CIF value of USD 35,000 at reduced customs duty of 15%for a period of 5 years from the Application Approval Date.
- The maximum number of e-4W allowed to be imported at the aforesaid reduced duty rate shall be capped at 8,000 nos. per year. The carryover of unutilized annual import limits would be permitted.
- The maximum number of EVs to be imported under this Scheme shall be such that the total duty foregone will be limited to the lower of the following:
- The maximum duty foregone per Applicant (limited to Rs.6,484 crore), or
- Committed investment of the Applicant (minimum Rs. 4150 crore).
- Total duty to be foregone shall be limited to lower of Rs. 6,484 crore or the Investment made under this Scheme.
- Investment:
| Minimum Investment Commitment in India during a 3 year window | Rs. 4,150 crore (equivalent to approx. USD 500 Mn) |
| Commencement of Operations | TheApplicant is required to setup manufacturing facility and commence operations for manufacturing of Eligible product i.e. e-4W within a period of 3 years from Application Approval Date |
| Maximum Investment Commitment in India during a 3 year window | No Limit |
| Domestic Value Addition (DVA) criteria during manufacturing | Minimum DVA of 25% to be achieved within 3 years and minimum DVA of 50% to beachieved within 5 years from date of issuance ofapproval letter by MHI/ PMA |
- The Standard Operating Procedure (SOP) issued under Production Linked Incentive (PLI) Scheme for Automobile and Auto Component (PLI Auto Scheme) would be followed to assess the DVA of the Eligible Product as required under the Scheme.
- Certification of DVA of Eligible Product manufactured in India by the Approved Applicant would be done by testing agency(ies) approved by MHI.
- Investment should be made for domestic manufacturing of Eligible Product. In case the Investment under the Scheme is made on brownfield project, a clear physical demarcation with the existing manufacturing facility(ies) should be made.
- Expenditure incurred on new Plant, Machinery, Equipment and Associated Utilities, Engineering Research and Development (ER&D)would be eligible.
- The expenditure incurred on Land will not be considered. However, Buildings of the mainPlant and Utilities will be considered as part of the investment provided it does not exceed 10% of committed investment.
- Expenditure incurred on Charging Infrastructure would be considered upto maximum 5% of the committed investment.
- Bank Guarantee:
- The Applicant’s commitment to setup manufacturing facility(ies), achievement of DVA and compliance with conditions stipulated under the Scheme shall be backed by aBank Guarantee from a scheduled commercial bank in Indiaequivalent to the total duty to be forgone, or Rs4,150 crore, whichever is higher, during the scheme period.
The Bank Guarantee should be valid at all times during the tenure of the Scheme.
- Application:
- The window for receiving applications through the Notice Inviting Applications will be for a period of 120 days (or more). Further, MHI shall have the right to open the Application Window, as and when required till 15.03.2026.
- A non-refundable application fee Rs. 5,00,000/- will be payable by the Applicant while filing the Application Form.
- The Notice for inviting applications under the Scheme is proposed to be issued shortly, whereby the prospective applicants would be able to submit online applications. The above notice would be published on the website of Ministry of Heavy Industries.
Table-I
Eligibility Criteria:
- The Applicant will need to meet the following criteria to qualify and receive benefits under the Scheme:
| Particulars | Eligibility Criteria |
| Global Group* Revenue (from automotive manufacturing), based on the latest audited annual financial statements at the time of application | Minimum Rs. 10,000 crore |
| Global Investment of Company or its Group* Company(ies) in fixed assets (gross block), based on the latest audited annual financial statements at the time of application | Minimum Rs. 3,000 crore |
*Group Company(ies) shall mean two or more enterprises which, directly or indirectly, are ina position to exercise twenty-six percent or more of voting rights in the other enterprise.
