India Mulls New EV Policy Guidelines - News

The Government of India is considering new guidelines under the electric vehicles (EV) policy. The Ministry of Heavy Industries (MHI) has already conducted one round of consultations. These guidelines will apply to greenfield investments and existing automotive sector companies, incentivizing investment from Indian companies as well. Existing players can apply for import licenses under the new policy without further registration. A second round of consultation is likely. 

The proposed guidelines will cover gaps in the initial notification. While new investments are encouraged, applications from Chinese companies will face stricter security checks. Last month, the government held a meeting with several automotive industry companies, including Maruti Suzuki India Ltd, Hyundai Motor India Ltd, Tata Motors Ltd, and VinFast, among others.

The country’s EV policy aims to attract investments from reputed global manufacturers, requiring a minimum of INR 4,150 crore and a three-year timeline to set up manufacturing facilities and reach 50 percent domestic value addition (DVA) within five years. The policy mandates a 15 percent customs duty on EVs with a minimum cost, insurance, and freight (CIF) value of US$ 35,000 and more for five years. Up to 40,000 EVs can be imported annually if investments exceed US$ 800 million. Lastly, companies must provide a bank guarantee to cover the foregone customs duty, which may be invoked if debit valuation adjustment (DVA) and investment criteria are not met.