India’s new Electric Vehicle (EV) policy aims to boost the sector with investment incentives and import duty reductions, attracting global players like Tesla. Here are the key highlights of this policy:
Minimum Investment Requirement: Companies establishing manufacturing facilities for EVs must invest a minimum of Rs 4,150 crore (approximately USD 500 million), with no maximum investment ceiling.
Three-Year Window: Manufacturers have a three-year window to set up operations in India and begin production of EVs.
- Domestic Value Addition (DVA): Within a maximum period of five years, these manufacturers are mandated to achieve a 50 percent domestic value addition (DVA) during the manufacturing process. Additionally, a localization level of 25 percent must be achieved by the third year.
Import Duty Reduction for Tesla: For global players like Tesla, limited imports of EVs will be permitted at a lower customs duty rate of 15 percent for vehicles with a minimum CIF (cost, insurance, freight) value of USD 35,000. However, this concessional rate applies only if the manufacturer establishes manufacturing facilities in India within a three-year timeframe with an investment of USD 500 million.
This policy is a game-changer for India’s EV sector and could pave the way for Tesla’s entry into the Indian market.