NEW DELHI — India’s scheme to boost domestic manufacturing of electric passenger cars is expected to gain real traction only after the India-EU Free Trade Agreement is finalized, as global automakers are waiting for clarity on the trade deal before committing investments, the government told Parliament on Tuesday.
In a written reply to the Lok Sabha, Minister of State for Heavy Industries Bhupathiraju Srinivasa Varma said several companies have indicated they will decide on joining the Scheme for Promotion of Manufacturing of Electric Passenger Cars (SPMEPC) once the terms of the India-EU FTA are settled.
Despite the October 21 deadline, no automaker submitted an application under the program. Many firms informed the government that uncertainty surrounding the FTA was a key reason for their hesitancy. Companies also cited concerns over restrictions on rare-earth magnets, which could affect their ability to meet the scheme’s Domestic Value Addition requirements.
Automakers further expressed reservations about meeting the mandated investment thresholds and timelines laid out under the scheme.
The Heavy Industries Ministry said it has undertaken extensive outreach to attract interest, including consultations during the scheme’s development, coordination with Invest India and several ministries, and communication through Indian embassies in countries where major automakers are based. A stakeholder meeting was recently held to address industry questions after the scheme drew no applicants.
On the proposed 15 percent import duty concession for EVs tied to a minimum investment of Rs 4,150 crore, the government said no revisions are under consideration. It also noted that while it has not conducted a formal assessment of how India-EU trade talks might affect the program, automakers themselves have linked their investment decisions to the FTA’s outcome.
The Ministry added that it has no current plans to reopen the application window or modify the scheme’s terms. (Source: IANS)
