India Unveils New EV Policy, Slashes Import Duty from 110% to 15%

In a significant move to boost electric mobility, the Ministry of Heavy Industries has unveiled a new policy—Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI)—slashing import duties on electric vehicles from 110% to 15%.

The revised duty structure aims to encourage global EV manufacturers to enter the Indian market, but with strong local investment and production commitments.

To qualify for the reduced import tariff, OEMs must invest at least ₹4,150 crore (around USD 500 million) in India within three years. They are permitted to use existing facilities for production, but past investments and land/building costs won’t count toward the investment threshold. The concessional rate will be applicable for five years.

Key compliance milestones include:

• Turnover targets: ₹2,500 crore by Year 2, ₹5,000 crore by Year 4, and ₹7,500 crore by Year 5

  
  

• Local manufacturing facility must be operational by the end of Year 3

  
  

• Local value addition (LVA) of 25% by Year 3, increasing to 50% by Year 5

  
  

The reduced duty will apply to a maximum of 8,000 premium EVs (priced above USD 35,000) per year. Beyond this cap, the standard 110% import duty will apply. The total duty benefit will be capped at ₹6,484 crore or the actual investment, whichever is lower, with unused annual quotas allowed to roll forward.

Additionally, costs related to machinery, R&D, charging infrastructure, and up to 5% of land/building investment (if part of the primary plant) will count toward the investment total.

The government will soon launch an online platform for SPMEPCI applications, with approval letters expected by August 2025.

The detailed article published by evindia.online can be accessed from https://evindia.online/news/india-launches-new-electric-vehicle-policy-lowers-import-duties-from-110-to-15