JUNE, 20259TOP STORIESGOVT ADDS R&D, CHARGING INFRA TO EV MANUFACTURING SCHEME BOOSTThe Indian government has modified its flagship Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMPCI) to recognize research and development (R&D) investments and charging infrastructure as part of the automakers' total investment commitments.These provisions, which were not updated in the announcement made in March 2024, will help attract global electric vehicle (EV) manufacturers and ultimately help the country build a viable ecosystem for electric mobility.Kamran Rizvi, the Secretary at the Ministry of Heavy Industries, stated that when this scheme was originally launched in March 2024, the investment in EV charging infrastructure was not included as eligibility, but now both R&D and investments in charging infrastructure qualify. While the Production Linked Incentive (PLI) scheme does not include charging infrastructure, SPMPCI clearly includes charging infrastructure.In the updated criteria and guidelines for investments in SPMPCI, the eligible investments will recognize EV manufacturing equipment, R&D facilities, charging infrastructure (limited to 5 % of total investments), and land and buildings (limited to 10% only if part of the principal EV manufacturing site) as part of the eligible investment. Registrations of dual-use facilities (paint shops, assembly lines, etc., that supply both EV and conventional vehicles) also apply to the eligible investments.The scheme achieves India's climate ambitions as well as adds jobs to the Indian economy since electric passenger vehicles only attract an import duty of 15% (which is generally at 70%) on each EV above USD35,000, on a maximum of 8,000 vehicles per year.H D Kumaraswamy said, "We are not actually expecting from them Tesla. They are planning to start with showrooms. They are not interested in manufacturing in India, as per the information available with us today. The normal PN3 conditions of India will apply to investments from countries sharing land borders"."Whoever wants to construct the factory, they have to invest 4,150 crore. They can do it in the same IMRWith the new EV policy initiated by the Indian government, the intent is to promote Indian manufacturing of electric vehicles by greatly slashing import duties.Under the Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI), import duties on fully-built imported electric cars priced over $35,000 (approx. 30 lakh) have been reduced from 110% to 15%, provided that the company must invest at least $500 million (approx. 4,150 crore) in Indian EV production within three years. Even existing plants can be used for this purpose.Manufacturers will have to hit revenue targets of 2,500 crore in the second year, 5,000 crore in the fourth year, and 7,500 crore in the fifth year, and local value addition will have to be at 25% by the third year and 50% by the fifth year.The scheme permits each manufacturer to import up to 8,000 EVs annually at this reduced duty rate; any unused quota can be carried forward to the following year. Total benefits provided under the scheme will be capped at 6,484 crore or the actual amount of investments made, whichever is less.Investment qualifies if made for R&D, manufacturing equipment, and tooling, while 5% of investments can be allocated for charging infrastructure and 10% toward land and factory buildings. The minimum criteria for automakers to qualify under the scheme are global automotive revenue of 10,000 crore and assets worth 3,000 crore.The policy seems to cater to the various pleas made by Tesla for reduction in import duties; however, the company presently has no manufacturing intentions for India. If Tesla shifts to local production, it could benefit from the new incentives. IMRINDIA'S EV POLICY SLASHES IMPORT DUTIES TO ATTRACT AUTOMAKERS
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