Despite launching the ‘Scheme to Promote Manufacturing of Electric Passenger Cars in India’ (SPMEPCI) to boost EV production, not a single application has been submitted so far. The Centre confirmed this in Parliament on Wednesday.
According to the Union Ministry of Heavy Industries, the last date to apply for the scheme was 21 October. Before that, the government held extensive discussions with several major global automobile manufacturers yet none of them filed an application.
Industry sources say the companies are waiting for clarity on the India–European Union Free Trade Agreement before making any commitments.
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The ministry stated that future investment plans of global EV manufacturers, including decisions on setting up production bases in India that depend heavily on the outcome of this India–EU trade deal. Until those negotiations conclude, companies are unwilling to take risks.
There are also objections regarding restrictions on the use of rare-earth magnets used in EV motors. Many industry leaders believe that producing high-performance EV motors without these magnets is nearly impossible. This could make it difficult for manufacturers to meet the scheme’s target of 50% Domestic Value Addition (DVA).
Additionally, companies argue that the scheme’s conditions which is a minimum investment of ₹4,150 crore, and the requirement to set up a manufacturing facility within just three years, are difficult to meet. Global uncertainties around the supply chain of EV raw materials make this even more challenging.
The Centre announced the scheme through a notification in March this year. Under it, selected companies would be allowed to import a fixed number of fully built electric cars at a very low duty of just 15% for five years. But this benefit comes with the condition that manufacturers must begin production in India and achieve 50% Domestic Value Addition within five years.
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Companies must also submit a bank guarantee covering the value of the customs duty concession or the committed investment amount.
The Heavy Industries Ministry said it has been in regular contact with foreign embassies, Invest India, state governments, and various investment bodies to boost participation. A recent meeting was held with all stakeholders to address their concerns. However, the ministry made it clear that there is no plan to alter the scheme’s terms or extend the deadline.
