The Indian government is stepping up attempts to increase participation in its electric vehicle (EV) import plan by hosting a workshop to garner feedback from companies interested in importing luxury EVs at lower prices. The project aims to better understand the limited response to the plan, which was introduced last year with the goal of luring top-tier EV manufacturers by offering attractive import conditions.
Introduced in 2023, the initiative aimed to encourage both import and domestic manufacturing of high-end electric vehicles by cutting import tariffs. This was viewed as a strategic effort to entice global EV leaders such as Tesla, who had previously shown an interest in entering the Indian market in exchange for lower import duties. However, the scheme's initial reception has been chilly, requiring the government to seek additional discussions with industry shareholders.
According to insiders, a workshop is scheduled for later this month, offering a venue for businesses to acquire clarification on the programme and provide feedback that may shape future policy changes. This workshop is the second round of consultations, following an initial conference in April 2024 that featured prominent corporations like Tata Motors, Maruti Suzuki, Hyundai, BMW, and Mercedes. The Asia Group, Tesla's representative in India, also attended the conference. Despite this high-profile involvement, few corporations have committed to the initiative.
The Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI) allows companies to import electric automobiles at a drastically lower 15% customs duty rate, as compared to the customary higher rates if the vehicles cost $35,000 or more. Participating enterprises must invest at least $500 million (about ₹4,150 crore) over a five-year period in EV production facilities or charging infrastructure, gradually increasing their domestic value addition (DVA) to 50% within five years. The programme allows for the import of up to 8,000 EVs per year at a lower tariff, with excess permits transferring to succeeding years.
Despite these incentives, corporations have been slow to reach the scheme's ambitious investment and localisation targets. The administration hopes that subsequent consultations will shed light on any further incentives or policy changes needed to encourage more involvement. As top EV manufacturers such as Tesla and VinFAST continues to monitor the scheme's development; any government changes might have significant impact on India's rapidly growing EV market in the near future.
