New E-Vehicle Policy Approved By Government to Promote EV Manufacturing

  • The Union Government has approved a scheme to promote India as a manufacturing destination for e-vehicles (EVs). 
  • The policy aims to attract investments from global EV manufacturers, promoting healthy competition, high production volume, economies of scale, lower production costs, and reduced imports of crude oil. 
  • The policy also allows limited imports of cars at lower customs duty for companies setting up manufacturing facilities for EVs. 
  • The minimum investment required is Rs 4150 Cr, with no cap on maximum investment. 
  • The policy also allows a localization level of 25% by the 3rd year and 50% by the 5th year. 
  • Customs duty of 15% applies to vehicles of minimum CIF value of USD 35,000 and above for a total period of 5 years. 
  • The duty foregone on the total number of EVs allowed for import is limited to the investment made or ₹6484 Cr (equal to incentive under the PLI scheme). 
  • The investment commitment must be backed up by a bank guarantee in place of the custom duty forgone.
Posted in Current Affairs.