The Government of India has officially notified the detailed guidelines for its new “Scheme to Promote Manufacturing of Electric Passenger Cars in India” (SPMEPCI). This initiative aims to attract fresh investments from global manufacturers and establish India as a global hub for electric vehicle (EV) production.
Approved by the Ministry of Heavy Industries (MHI), the scheme is aligned with India’s commitment to achieving net-zero emissions by 2070, promoting sustainable mobility, and strengthening the domestic manufacturing ecosystem under the Make in India and Aatmanirbhar Bharat programs.
Reduced Import Duties to Encourage Global Investment
To encourage global manufacturers, the scheme permits approved applicants to import Completely Built Units (CBUs) of electric four-wheelers with a minimum CIF value of USD 35,000 at a reduced customs duty of 15% for five years. However, annual imports are capped at 8,000 units, and carryover of unused quota is allowed.
Duty concessions are subject to an overall ceiling—the total duty foregone must not exceed the lower of Rs 6,484 crore or the committed investment under the scheme. Approved applicants must commit a minimum investment of Rs 4,150 crore (approximately USD 500 million), with no upper investment cap.
Manufacturing Timeline and Domestic Value Addition (DVA)
Approved applicants are required to set up domestic manufacturing facilities and begin production within three years of approval. To qualify for continued benefits, companies must achieve a minimum Domestic Value Addition (DVA) of 25% within three years and at least 50% within five years.
Investments can include expenditure on new plants, machinery, equipment, associated utilities, and engineering research and development. Buildings related to the main plant and utilities may be counted as investment up to 10% of the total commitment. Spending on charging infrastructure is capped at 5% of the total.
Bank Guarantee and Compliance Measures
All investment and DVA commitments must be backed by a bank guarantee from a scheduled commercial bank in India, equivalent to the greater of Rs 4,150 crore or the total duty foregone. This guarantee must remain valid throughout the scheme period.
DVA certification will be conducted by MHI-approved testing agencies, using the Standard Operating Procedure (SOP) outlined in the existing PLI Scheme for Auto and Auto Components.
Also read: India to Install 72,000 EV Chargers Under PM E-Drive
Application Process and Eligibility
Applications will be accepted online through a dedicated portal to be announced shortly. The window for submissions will remain open for at least 120 days, with the possibility of extension until March 15, 2026. A non-refundable fee of Rs 5 lakh is applicable for each application.
To qualify, applicants must meet the following eligibility criteria based on the latest audited financial statements:
Global revenue from automotive manufacturing: minimum Rs 10,000 crore
Global investment in fixed assets: minimum Rs 3,000 crore
This ambitious scheme sets the stage for India’s transition into a leading destination for EV manufacturing by combining market access with strong domestic production requirements and a focus on green mobility.
