The Ministry of Heavy Industries (MHI) launched a portal for application process under the Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI).

What is the scheme about?

• India is currently the world’s third largest automobile market and one of the fastest growing automotive markets in the world. 

• The current market size of the automotive sector is Rs 12.5 lakh crore ($151 billion) and the sector is expected to cross Rs 24.9 lakh crore ($300 billion) by 2030. 

• The automotive sector contributes over 7.1 per cent to India’s GDP.

• Being the third largest automotive market in the world, India has the opportunity to lead the global transition from conventional ICE powertrain to a more efficient and decarbonised electric vehicle (EV) technology. 

• Electric vehicles are expected to become a major category within the automobile sector.

• The government has taken several initiatives to promote the growth of the EV industry. 

• These include the FAME India schemes and the two production linked incentive (PLI) schemes.

• On March 15, 2024, the government notified the Scheme to Promote Manufacturing of Electric Passengers Cars in India (SPMEPCI) to attract investments from global electric passenger car manufacturers, generate employment opportunities, achieve the goal of ‘Make in India’ and promote India as a manufacturing destination for electric passenger cars.

• The Department of Revenue also issued the notification for reduced import duties in line with the provisions of the scheme.

Features of the scheme:

• The scheme shall help to attract investments from global EV manufacturers  and promote India as a manufacturing destination for e-vehicles. 

• 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 Cost, Insurance, and Freight (CIF) value of $35,000 at reduced customs duty of 15 per cent for a period of five 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.

• With a minimum investment threshold, it provides an enabling policy environment for leading global and domestic players to establish long-term manufacturing footprints in the country. 

• Through calibrated customs duty concessions and clearly defined domestic value addition (DVA) milestones, the scheme strikes a balance between introducing cutting-edge EV technologies and nurturing indigenous capabilities.

• The initiative is aligned with India’s national goals of achieving Net Zero by 2070, fostering sustainable mobility, driving economic growth, and reducing environmental impact. 

• It is designed to firmly establish India as a premier global destination for automotive manufacturing and innovation.

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