New Delhi: India is set to unveil detailed guidelines for its electric vehicle (EV) manufacturing incentive scheme next month, offering global automakers, including Tesla, a flexible pathway to enter and invest in the Indian market.
The Scheme to Promote Manufacturing of Electric Passenger Cars in India (SMEC), first announced in March 2024, aims to bolster EV production and attract significant foreign investment.
Officials revealed that the upcoming guidelines will include an “on-tap” facility, enabling companies to explore the market before committing to full-scale local manufacturing.
This move is expected to benefit companies like Tesla, which is currently scouting for showroom spaces and recruiting staff in India but has yet to commit to domestic production.
“The SMEC guidelines will be finalised within a fortnight and announced next month,” a senior government official told ET.
The window to apply for incentives could remain open for 120 days or longer and may be reopened periodically, allowing automakers to time their market entry strategically.
The scheme offers a major incentive: automakers investing a minimum of USD 500 million to set up local manufacturing will benefit from a reduced 15 per cent import duty on completely built-up (CBU) electric cars priced above USD 35,000 for up to five years.
provision will allow companies like Tesla to test consumer demand through imports before establishing manufacturing units.
In a further boost to existing players, the scheme will also recognize investments made in setting up EV assembly lines within current factory premises, enabling legacy manufacturers to transition into the EV space without building entirely new facilities.
Industry experts view the flexible framework as a calculated move to accelerate India’s EV adoption while minimizing risks for global automakers.
With the final guidelines imminent, the government anticipates receiving applications as early as next month, marking a pivotal step in India’s green mobility ambitions.
