(File pic) Kia EV6
| Photo Credit:
KAMAL NARANG

India’s latest guidelines for Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI), permitting companies that commit investing at least ₹4,150 crore in local manufacturing to import 8,000 electric cars/year at a reduced duty of 15 per cent, have attracted European carmakers Mercedes-Benz, Skoda-Volkswagen Auto and South Korea’s Hyundai and Kia. However, American billionaire Elon Musk’s Tesla is not interested in the ‘Make in India’ scheme right now.

“We are not expecting from them (Tesla). They are only opening up showrooms here, but not interested in manufacturing,” HD Kumaraswamy, Minister of Heavy Industries, told reporters here while notifying the guidelines on SPMEPCI.

Sources told businessline that Tesla has not pledged any major investment commitment so far, whether for manufacturing or charging infra.

A senior government official said that Tesla representative participated only in the first round of stakeholder discussions for the scheme last year, and after that in the next two rounds of meetings for stakeholder deliberations, the company’s representative did not attend at all.

MHI said it will open the portal for applications within this month, expecting the global players to apply at the earliest.

Pre requisites

Under the SPMEPCI, the EV makers require a minimum investment of ₹4,150 crore (around $500 million) for three years during which they have to set up a manufacturing facility and commence operations and roll out a vehicle. The applicant should also have a global revenue of ₹10,000 crore at the time of application, to qualify and receive the benefits under the scheme.

The electric carmakers also must have minimum domestic value addition (DVA) of 25 per cent to be achieved within those three years and minimum DCA of 50 per cent to be achieved within five years from date of issuance of approval letter by MHI.

“The approved applicants will also be allowed to imported completely built units (CBUs) of electric four-wheelers (e-4W) manufactured by global group companies with a minimum cost value (CIF) of $35,000 at reduced customs duty of 15 per cent for a period of five years from application approval date,” the Minister said.

He also noted that the maximum number of e-4W allowed to be imported at the aforesaid reduced duty rate will be capped at 8,000 units per year. The carry-on of unutilised annual import limits would be permitted.

But, in the case of Tesla, if the company doesn’t commit any investment under the scheme, then any vehicle that it imports to India will attract the standard customs duty for any imported CBU, which is at 110 per cent (70 BCD+ 40 AIDC) right now on vehicles costing more than $40,000 and 70 per cent BCD on passenger vehicles costing up to $40,000.

Another condition is that the maximum number of EVs to be imported under this scheme will be such that the total duty foregone will be fixed at a maximum of ₹6,484 crore or the committed investment of the applicant (₹4,150 crore).

Published on June 2, 2025