The minister however added that many European companies like Hyundai, Mercedes Benz, Skoda and Kia have shown interest in manufacturing units in India under the new EV policy
PUNE: In a significant step to attract global carmakers to make-in-India for the world, the central government on June 2 notified final guidelines for its flagship EV policy to domestically manufacture electric cars.
But much touted Tesla Inc is not likely to be one of them.
“Mercedes-Benz, Volkswagen-Skoda and Hyundai Motor Co. have already shown interest,” Heavy Industries Minister HD Kumaraswamy told the media during a press conference on Monday. “We don’t expect Tesla to manufacture in India,” he said, adding that, “As from what we know, Tesla plans to open only two showrooms in India to sell cars.”
Announced last year on March 15, the ‘Scheme to Promote Manufacturing of Electric Cars in India’ offers to slash import duty to 15 per cent compared to the current 70-100 per cent on electric cars priced at least $35,000 and above if their maker invests at least $500 million or Rs 4,150 crore to set up a local plant in India within three years from receiving approval by the government. The maximum import duty foregone per applicant has been capped at Rs 6,484 crore.
The electric car maker must also meet 25 per cent local content requirements in three years and 50 per cent in five years, as per the notified guidelines on Monday.
It also said up to 8,000 cars can be imported annually at this reduced rate for five years. An electric car manufactured here has to achieve 25% localization in three years and 50% in five years.
Officials said the application window for this Scheme may open in a couple of weeks for at least 120 days.
"To encourage the global manufacturers to invest under the Scheme, the approved applicants will be allowed to import Completely Built-in Units (CBUs) of e-4W with a minimum CIF value of USD 35,000 at reduced customs duty of 15 per cent for a period of 5 years from the Application Approval Date. Approved applicants would be required to make a minimum investment of Rs 4,150 crore in line with the provisions of the scheme," an official statement said.
Expenditure incurred on new plant, machinery, equipment and associated utilities, engineering research and development (ER&D) would be eligible for availing investment-linked benefits under the scheme.
However, expenditure on land will not be considered, although new buildings of the main plant and utilities will be considered as part of the investment, provided it does not exceed 10 per cent of committed investment.
The expenditure incurred on charging infrastructure would be considered up to 5 per cent of the committed investment.
The applicant's commitment to set up manufacturing facilities, achievement of DVA and compliance with conditions stipulated under the scheme shall be backed by a bank guarantee from a scheduled commercial bank in India, equivalent to the total duty to be foregone, or Rs 4,150 crore, whichever is higher.
The notice for inviting applications will open shortly and continue up to 15 March 2026.
A non-refundable application fee of Rs 5,00,000 will be payable by the applicant while filing the application form.
To qualify and receive benefits under the scheme, an applicant is required to have a global group revenue from automotive manufacturing of a minimum Rs 10,000 crore.
Moreover, the global investment of a company or its group companies in fixed assets must be at least Rs 3,000 crore, based on the latest audited annual financial statements at the time of filing the application.
