The Ministry of Heavy Industries (MHI) has officially notified the detailed guidelines for the “Scheme to Promote Manufacturing of Electric Passenger Cars in India,” initially announced on March 15, 2024. This strategic scheme is designed to elevate India as a global hub for electric vehicle (EV) manufacturing, reinforcing the Make in India initiative.

As per the guidelines, approved applicants can import completely built-up (CBU) electric four-wheelers (e-4Ws) from global group companies with a minimum CIF (cost, insurance, and freight) value of $35,000 at a reduced customs duty rate of 15 per cent for five years. The scheme caps CBU imports at 8,000 units annually, with provision for carryover of unused quota.

Duty forgone under the scheme is limited to Rs 6.484 billion or the actual committed investment—whichever is lower. Brownfield investments must include clear physical demarcation of new manufacturing units. Eligible investments comprise capital expenditure on plant, machinery, engineering R&D, and utilities and buildings (capped at 10 per cent of total investment), while land acquisition costs are excluded. Charging infrastructure investments are capped at 5 per cent of the committed total.

Applicants must commit to a minimum investment of Rs 4.15 billion over three years, with no upper cap, and begin manufacturing eligible e-4Ws within this timeframe. The scheme mandates a domestic value addition (DVA) of 25 per cent within three years and 50 per cent within five years, following PLI SOPs and third-party certification approved by MHI.

To ensure compliance, applicants are required to submit a bank guarantee from a scheduled commercial bank in India equivalent to the higher of the total duty foregone or Rs 4.15 billion. This guarantee remains valid for the entire scheme duration. An application fee of Rs 500,000 is applicable, and the submission window will stay open for 120 days from the notification date, extendable until March 15, 2026.

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Applicants must demonstrate a minimum global group revenue of Rs 10 billion from automotive manufacturing and Rs 3 billion in global fixed assets, based on the latest audited financials, to be eligible under the scheme.

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