India’s Electric Vehicle Initiative Takes a Step Forward
The Indian government has opened a portal for automakers to apply under a scheme aimed at promoting the manufacturing of electric passenger cars in the country. Union Heavy Industries Minister H D Kumaraswamy inaugurated the portal on June 24, 2025, which will remain open until October 21.
The scheme offers significantly lower import tax rates for automakers that commit to investing in domestic electric vehicle production. Global electric vehicle giants, including Tesla and Mercedes-Benz, can now apply for the scheme. Minister Kumaraswamy mentioned that Tesla is only interested in opening showrooms in India to sell its cars and is not inclined towards setting up manufacturing facilities.
Key Features of the Scheme
- Automakers can import up to 8,000 electric vehicles at a reduced duty rate of 15% if they commit to investing ₹4,150 crore in local EV manufacturing.
- Companies must begin operations at their manufacturing facilities within three years of receiving approval.
- Applicants are required to achieve at least 25% domestic value addition within three years and 50% within five years.
- The maximum duty foregone per applicant is capped at ₹6,484 crore.
- A non-refundable application fee of ₹5,00,000 is required.
Eligibility Criteria
To qualify for the scheme, an applicant must:
- Have a global group revenue from automotive manufacturing of at least ₹10,000 crore.
- Have a global investment in fixed assets of at least ₹3,000 crore.
The Ministry of Heavy Industries will encourage participation from countries with major automotive industries. However, investment restrictions applicable to countries sharing land borders with India, such as Pakistan and China, will remain in place.
The scheme aims to boost electric vehicle manufacturing in India by attracting significant investments and promoting local production. With the portal now open, several auto firms have shown preliminary interest, although the actual number of applications remains to be seen.
