Govt of India approves National Electric Vehicle Policy to promote green mobility

Anushka Khare Posted on: 2024-03-15 13:45:00 Viewer: 2,663 Comments: 0 Country: India City: New Delhi

Govt of India approves National Electric Vehicle Policy to promote green mobility (Representative Image)

New Delhi, India (Urban Transport News): The Union Government of India has given the green light to a comprehensive scheme aimed at positioning India as a prime manufacturing hub for electric vehicles (EVs), leveraging the latest technological advancements in the sector. This policy initiative is geared towards attracting substantial investments from renowned global EV manufacturers, with the overarching goal of fostering indigenous production capabilities and promoting the adoption of cutting-edge EV technology within the country.

The newly approved policy framework is designed to facilitate the establishment of EV manufacturing facilities in India, with a stringent timeline of three years for setting up these facilities and commencing commercial production of EVs. Additionally, companies are mandated to achieve a minimum of 50% domestic value addition (DVA) within five years, thereby fostering localized manufacturing ecosystems and reducing dependence on imports.

Key highlights of the policy include:

  • Minimum Investment Requirement: Companies venturing into EV manufacturing are required to make a minimum investment of Rs 4150 crore (approximately USD 500 million), with no cap on the maximum investment.

  • Timeline for Manufacturing: A strict timeline of three years is set for establishing manufacturing facilities in India and initiating commercial production of EVs. Furthermore, companies must achieve a minimum of 50% domestic value addition within five years.

  • Customs Duty Incentives: To incentivize companies to set up manufacturing facilities in India, a reduced customs duty of 15% (applicable to Completely Knocked Down - CKD units) will be imposed on vehicles with a minimum CIF value of USD 35,000 and above, for a period of five years.

  • Import Allowance: Companies establishing manufacturing facilities with an investment of USD 800 million or more will be permitted to import a maximum of 40,000 EVs at a reduced customs duty rate, subject to annual limits.

  • Bank Guarantee Requirement: Investment commitments made by companies must be backed by a bank guarantee, which will be invoked in case of non-compliance with DVA and minimum investment criteria.

The implementation of this policy is expected to yield multifaceted benefits, including:

  • Advancing the Make in India initiative and bolstering indigenous manufacturing capabilities.
  • Fostering healthy competition among EV players, leading to increased production volumes and economies of scale.
  • Reducing reliance on imported crude oil and narrowing the trade deficit.
  • Mitigating air pollution, particularly in urban centers, and promoting a cleaner, greener environment.
  • Enhancing the accessibility of the latest EV technology to Indian consumers, thereby catalyzing the adoption of sustainable transportation solutions.

"The new electric vehicle policy will make India a global powerhouse for EV manufacturing. It is a boon for India’s booming economy and acts as a major push forward in the nation’s aspirations for clean transportation. Keeping a strong focus on prioritizing domestic manufacturing and encouraging competition and growth, this policy will provide enough chances and harbour enough space to facilitate increasing the adoption of EVs across the nation and aligns with the “Make In India" initiative promoting local production and job creation. This policy acts as a gateway for large-scale investments from global EV giants like Tesla, making India an EV manufacturing hub globally and providing the much-needed impetus for the local players to enhance their manufacturing capacities and adapt high-tech EV technologies. This healthy rivalry will drive innovation, reduce production costs, and ultimately benefit Indian consumers with a broader range of high-quality, affordable EVs," commented Raman Bhatia, Founder & Managing Director at Servotech Power Systems Ltd.

 

As India embarks on this ambitious journey towards becoming a global leader in EV manufacturing, the newly approved policy framework sets the stage for transformative growth and innovation in the automotive sector.





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