New Delhi: The Government of India has formally opened applications for its flagship policy to promote domestic manufacturing of electric passenger vehicles. The move offers significantly reduced import duties to global automakers that commit to investing in the country’s EV sector.
Union Heavy Industries Minister H. D. Kumaraswamy launched the dedicated portal on Tuesday, with the application window open until October 21, 2025. The scheme is expected to attract global players with incentives tied to local manufacturing, technology transfer, and domestic value addition.
Despite widespread speculation, Minister Kumaraswamy clarified that Tesla has shown interest only in retail operations, not manufacturing. “Their [Tesla’s] interest is only to open the showroom. They want to sell their cars in India. Other than that, there is no further development,” Kumaraswamy said.
He also addressed media reports quoting Mercedes-Benz as unwilling to participate, stating that the German luxury automaker had already invested heavily in the scheme before its launch.
Under the scheme, automakers committing to invest ₹4,150 crore in EV manufacturing in India will be allowed to import up to 8,000 electric vehicles per year at a reduced import duty of 15 percent, significantly lower than the current rate of 70-100 percent.
Hon’ble Union Minister of Heavy Industries & Steel, Shri @hd_kumaraswamy, launched the application portal under the Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI), accompanied by Shri Kamran Rizvi, Secretary, MHI, and Dr. Hanif Qureshi, Additional… pic.twitter.com/yjuuhrO57G
— Ministry of Heavy Industries (@MHI_GoI) June 24, 2025
The policy mandates that companies must start operations within three years of approval, and begin local manufacturing of e-four wheelers (e-4Ws) with at least 25 percent domestic value addition (DVA) within that timeframe. This DVA must increase to 50 percent within five years.
“The scheme is designed to bring in high-value technology and deepen the EV manufacturing ecosystem,” said Kamran Rizvi, Secretary of the Ministry of Heavy Industries.
Only automakers with a global automotive manufacturing revenue of at least ₹10,000 crore and a minimum global investment in fixed assets of ₹3,000 crore are eligible to apply, based on the latest audited financials.
A bank guarantee from a scheduled commercial bank in India equivalent to the total duty forgone or ₹4,150 crore whichever is higher is mandatory for approval.
While the current round of applications closes on October 21, the Ministry retains the right to reopen the window periodically until March 15, 2026.
