MHI Approves Scheme to Promote the Manufacturing of E-Vehicles in India
To encourage the production of electric passenger automobiles in India, the Ministry of Heavy Industries (MHI), Government of India (GOI), has approved a new E-Vehicle (Electric-Vehicle) initiative.
Main highlights of the scheme:
1. Under the scheme, the automobile company should set up manufacturing facilities in India with
a minimum investment of Rs. 4,150 crore (USD 500 million), for manufacturing of
(Electric four-wheelers).
2. If the new scheme's requirements are met, foreign automakers will be permitted to import up to 8,000 EV passenger cars (e-4W) annually at a discounted import duty of 15% for a period of five years following MHI certification.
3. The EVs imported to India should have a minimum CIF (Cost, Insurance & Freight) price of USD 35,000.
4. As of 16th March 2024, customs duty ranging from 70 % to 100 % will be levied on the cars imported as
completely built units (CBUs). It depends on engine size and Cost, Insurance, and Freight (CIF) value less
or above USD 40,000.
About the scheme:
1. The manufacturing plant must be operational within three years of MHI's approval date.
2. They should also achieve a minimum domestic value addition (DVA) of 25% in the vehicles
manufactured within a 3-year period, and a minimum of 50% by the end of the 5th year.
3. The company’s investment commitment must be backed up by a bank guarantee for the value of the
reduced customs duty
4. When the DVA and minimum investment requirements outlined in the program guidelines are not met, the Bank guarantee will kick in.
5. .The total amount of import duty cut will be limited to the investment made or Rs 6,484 crore (equal to
the incentive under the PLI scheme), whichever is lower.
Additional information about scheme:
1. PLI-Auto launched in 2021 provides incentives to industries for the promotion of domestic
manufacturing and draws investments into the value chain of the automotive manufacturing industry.
2. Production Linked Incentive (PLI) schemes for producers of electric vehicles have been introduced by MHI. These schemes include the PLI Scheme for Automobile and Automotive Components (PLI-Auto) and the PLI Scheme for Advanced Chemistry Cell (PLI-ACC).
3. PLI-ACC incentivise manufacturers of advanced chemistry cells.
