VinFast Revives Interest in India's EV Manufacturing Scheme

• VinFast plans to join India’s EV scheme after a $500 million Tamil Nadu investment
• Focus on localisation to cut costs and boost competitiveness
• Offers incentives and lower import duties but has seen limited interest so far

Vietnam-based electric vehicle maker VinFast has said it plans to participate in India’s Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI), following its announcement of a fresh $500 million investment in Tamil Nadu. The company said the new investment should now make it eligible under the scheme's requirements.

The SPMEPCI was approved by the central government in June 2024 to attract global EV manufacturers, but VinFast's earlier investments which began in January 2024 fell outside the scheme's eligibility window.

Pham Sanh Chau, CEO, Vingroup Asia and VinFast Asia stated, “We are working on that...Last time we missed the opportunity because they (government) tried to attract new investor, whereas we have become the old investor...we will work with them. They asked us to invest $500 million within three years, which is not an issue for us, because we have already invested the first $500 million, and the second $500 million. But localisation is a matter that we need to consider because we need to calculate a lot of other elements as well”.

The Ministry of Heavy Industries (MHI) had rejected the company's application for incentives because the previous investments of the company failed to meet the eligibility requirements. VinFast believes that its latest funding commitment allows it to meet the minimum investment requirement for the program.

He added, “At the moment, it’s (localisation) 15 per cent...localisation is moving very aggressively...We don’t have the target yet because our purchasing team is looking very aggressively at that, and they have engaged with companies like Uno Minda, Spark Minda, MapmyIndia and many others. So, I believe that 2026 will be a year for more localisation”.

Also Read: VinFast to Invest $500m to Expand Tamil Nadu EV manufacturing

Company officials said VinFast's long-term goal in India is to maximise localisation to reduce costs and improve competitiveness in the domestic market. The automaker has recently proposed a $500 million investment to the Tamil Nadu government and intends to apply for all relevant state incentives financial support measures and statutory exemptions in line with prevailing policies.

The SPMEPCI program requires approved applicants to spend a minimum of ₹4,150 crore which equals approximately $500 million to create electric four-wheeler manufacturing plants in India.

The plants must start operations within three years after MHI approval and they must reach a minimum domestic value addition (DVA) requirement of 25% during that time. The DVA requirement rises to 50% within five years.

The scheme also allows approved companies to import up to 8,000 completely built electric vehicles annually at a reduced customs duty of 15%, subject to conditions.

The scheme was created to attract Tesla VinFast and major European car manufacturers but it has not yet succeeded in bringing in any participants.

The government expanded program eligibility to include certain brownfield investments after industry feedback which enables domestic manufacturers such as Tata Motors and Mahindra & Mahindra to apply. The application window opened in June 2025 and will remain open until March 15, 2026.