India Launches EV Manufacturing Scheme; Portal Open for Big Auto Players

Key Points (For SSC & Govt Exam Aspirants)

  1. Scheme launched: Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI), notified on 15 Mar 2024.
  2. Portal live: Applications open from 24 JunтАУ21 Oct 2025 (extendable until 15 Mar 2026).
  3. Import duty benefit: Lowered to 15% for CBUs valued тЙетАпUSDтАп35,000, capped at 8,000 units annually.
  4. Minimum investment: тВ╣4,150тАпcrore within 3 years of approval.
  5. Domestic value addition (DVA): 25% in 3 years, 50% in 5 years.
  6. Eligibility: Global group revenue тЙе тВ╣10,000тАпcrore; fixed assets тЙе тВ╣3,000тАпcrore.
  7. Security: Bank guarantee equals duty forgone or тВ╣4,150тАпcr, whichever is higher.
  8. Application fee: тВ╣5тАпlakh non-refundable.
  9. TeslaтАЩs stance: Interested only in showrooms; not in local manufacturing.
  10. Foreign investment constraints: Applies to land-border sharing nations like Pakistan, China .

Complete Details

The Government of India, via its Ministry of Heavy Industries, has unveiled SPMEPCI to position the country as a leading EV manufacturing hub while supporting тАЬMake in IndiaтАЭ and climate goals.

  • Import duty concession: EV firms attaining Minimum CIF valueтАпUSDтАп35,000 per vehicle can import up to 8,000 CBUs per year at 15% duty (vs 70тАУ110%) for 5 years. Unused quotas carry over. Total duty waiver per applicant capped at тВ╣6,484тАпcr or equal to investment.
  • Invest & set up: Automakers must invest тВ╣4,150тАпcr within 3 years, deploying capital in new plants, machinery, R&D, utilities, and up to 5% in charging infrastructure. Land costs are excluded; buildings included up to 10% of investment.
  • Domestic Value Addition: 25% by end of year 3, escalating to 50% by year 5. DVA certified using PLI-Auto SoP and testing agencies.
  • Revenue benchmarks: Additional clause: Firms must attain тВ╣50тАпbn rev from EVs in year 4 and тВ╣75тАпbn in year 5; penalties progressively apply if targets unmet.
  • Eligibility & compliance: Companies need тВ╣10,000тАпcr group revenue and тВ╣3,000тАпcr fixed assets globally. Application requires тВ╣5тАпlakh fee and bank guarantee equating duty benefit or тВ╣4,150тАпcr.
  • Timeline: Operations must commence within 3 years post-approval. Application portal open 24 JunтАУ21 Oct 2025; window may reopen until 15 Mar 2026.
  • TeslaтАЩs position: Tesla plans to sell via showrooms only; no immediate manufacturing interest.
  • Strategic impact: By incentivising global OEMs, including Mercedes-Benz, VW, Hyundai, Kia, India aims at tech transfer, job creation, and sustainable growth.
  • Geopolitical clause: Investment restrictions upheld for countries like Pakistan and China.

UPSC-Relevant Organization/State Facts

Ministry of Heavy Industries (MHI):

  • Role: Manufactures incentive schemes in automobile, auto-component, defence & heavy engineering sectors.
  • Parent ministry: Government of India, headquartered in New Delhi.
  • Aim: Promote domestic manufacturing aligned with тАЬMake in India,тАЭ employment creation, green mobility initiatives.

Relevant Schemes:

  • PLIтАУAuto: Launched 15 Sep 2021; allocated тВ╣25,938тАпcr for AAT products.
  • PLIтАУACC: Approved May 2021; aims to build 50тАпGWh battery capacity (тВ╣18,100тАпcr outlay).

MCQs & Practice Qs

Potential Question:

Which of the following are mandatory conditions under SPMEPCI?
A. Import up to 8,000 EV CBUs annually at 15% duty
B. Invest тВ╣4,150тАпcr in manufacturing within 3 years
C. Achieve 30% Domestic Value Addition within 4 years
D. Maintain a minimum bank guarantee equal to duty foregone

Options:

  1. A, B, D
  2. A, C, D
  3. B, C, D
  4. All of the above

Answer: 1

FAQs (UPSC AnswerтАСWriting Style)

Q1. What is the objective of SPMEPCI, and how does it fit into IndiaтАЩs climate commitments?
Answer: The SPMEPCI aims to bolster domestic manufacturing of electric passenger vehicles by incentivising global OEMs through import duty concessions tied to investment and localisation targets. It supports IndiaтАЩs commitment to achieving netтАСzero emissions by 2070 by facilitating a shift from ICE to EV, reducing fossil fuel dependence and urban air pollution, while also advancing economic growth through employment and technology transfer.

Q2. Explain the key eligibility criteria and phased localisation conditions under SPMEPCI.
Answer: Eligible applicants must have global automotive revenues тЙе тВ╣10,000тАпcr and global fixed assets тЙе тВ╣3,000тАпcr. They must invest тВ╣4,150тАпcr in local manufacturing within 3 years post-approval and commence production similarly. Phased Domestic Value Addition requirements are 25% within 3 years and 50% within 5 years. Compliance is assured via bank guarantees and certified monitoring. The framework ensures that duty benefits translate into real domestic capability building.

Q3. Discuss how the SPMEPCI balances import duty incentives with manufacturing conditionality to foster тАЬMake in India.тАЭ
Answer: The policy grants temporary, conditional import duty relief (15% vs 70тАУ110%) on high-value EVs, capped at 8,000 CBUs annually. These benefits are contingent on strict investment thresholds and localisation milestones. This balance ensures that incentives are not mere subsidies but enablers of long-term domestic infrastructure, R&D, and supply chain development. Phased localisation compels sustained domestic integration, while bank guarantees ensure accountability. Collectively, this synergy aligns fiscal concession with manufacturing growth, bolstering IndiaтАЩs strategic autonomy and global competitiveness.