₹4,150 Cr Investment Mandate to Boost Domestic Manufacturing
Union Minister H.D. Kumaraswamy Unveils Key Electric Car Policy Aimed at Global Giants
New Delhi/Bengaluru: In a major boost to India’s electric mobility mission, Union Minister for Heavy Industries H.D. Kumaraswamy on Monday announced the launch of the Government of India’s new scheme to promote the manufacturing of electric passenger cars in the country. The initiative, titled the Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMECPI), is a flagship effort under the leadership of Prime Minister Narendra Modi to make India a global hub for electric vehicle (EV) production.
The scheme is aimed at attracting leading international automakers to invest and manufacture EVs in India. With a minimum investment commitment of ₹4,150 crore within three years, the policy seeks to combine foreign capital with local production to accelerate the shift towards sustainable mobility. The Ministry of Heavy Industries notified detailed guidelines for the scheme on March 15, 2024, while the Department of Revenue simultaneously issued a notification to allow concessional import duties for eligible manufacturers.
Speaking at the launch, Union Minister Kumaraswamy said the scheme was a clear manifestation of Prime Minister Modi’s commitment to green growth and industrial transformation. “Under the Prime Minister’s visionary leadership, India is taking bold strides toward net zero by 2070 while ensuring that economic development, technological progress and employment generation go hand in hand,” he said.
To make the Indian market more attractive to global EV manufacturers, the scheme offers a significant incentive and the Union Minister added on that “companies approved under the programme can import Completely Built Units (CBUs) of electric four-wheelers priced at USD 35,000 or more at a reduced customs duty of 15 percent, compared to the current rate of around 70 percent. This concessional import window will be available for five years from the date of application approval and will be capped at 8,000 vehicles annually, with provisions to carry forward unused quotas.”
Under the visionary leadership of Hon’ble PM Shri @narendramodi avaru, we’ve launched a landmark EV manufacturing scheme to make India a global hub for electric mobility. With ₹4,150 Cr investment mandate, this is Make in India in motion — for a cleaner, stronger future. ⚡🇮🇳… pic.twitter.com/dZZvAZJvqX
— ಹೆಚ್.ಡಿ.ಕುಮಾರಸ್ವಾಮಿ | H.D.Kumaraswamy (@hd_kumaraswamy) June 2, 2025
However, the incentives come with strict conditions. To qualify, companies must begin manufacturing operations in India within three years and achieve a minimum 25 percent domestic value addition (DVA) within the same period. This must rise to at least 50 percent within five years. Compliance will be monitored under the standard operating procedures of the Production Linked Incentive (PLI) scheme for automobiles, and DVA certification will be carried out by testing agencies approved by the Ministry.
The policy is designed not only to bring in investment but also to ensure genuine local manufacturing. Companies will be required to invest in plant, machinery, research and development, and other associated infrastructure. While land costs are excluded from the investment calculation, expenses on factory buildings will be considered, provided they do not exceed 10 percent of the committed investment. Additionally, up to 5 percent of the investment can go toward setting up charging infrastructure.
Union Minister H.D.Kumaraswamy said “as a safeguard, companies must furnish a bank guarantee equal to the greater of ₹4,150 crore or the total customs duty they are exempted from over the scheme period. This guarantee must remain valid throughout the tenure of the scheme and will serve as a financial assurance of compliance with investment and localisation targets.”
The application window for the scheme is expected to open shortly and will initially remain open for 120 days. The Ministry may reopen the window in the future as required, with the scheme accepting applications until March 15, 2026. Companies will be required to pay a non-refundable application fee of ₹5 lakh.
To be eligible, applicants must be global automotive manufacturing groups with an annual revenue of at least ₹10,000 crore and a minimum global fixed asset base of ₹3,000 crore. Group companies must also hold at least 26 percent voting rights in each other.
The scheme is a game-changer for India’s automotive sector, especially as it aligns with global trends toward decarbonisation and electric mobility. With strong incentives, strict localisation norms, and a clear commitment to Make in India, the scheme is seen as a strategic invitation to some of the world’s top EV makers to set up shop in the country.
Union Minister Kumaraswamy underscored that this is not just about cleaner transport, but about ushering in a new era of industrial growth. “This is the Prime Minister’s long-term vision in action. We are creating a future-ready industrial ecosystem where India doesn’t follow it leads,” he concluded.
