No takers yet for govt’s EV import scheme

Three months after the Centre announced a scheme offering duty concessions on imported electric cars in exchange for commitments to local manufacturing, primarily aimed at wooing Tesla, no automaker has expressed interest.

“No one has come,” a senior government official said in response to a question on how many auto players had evinced interest. The Ministry of Heavy Industries launched a portal on June 24 for accepting applications under the Scheme for Promotion of Manufacturing of Electric Passenger Cars in India (SPMEPCI). The last day for applying for the scheme is October 21, 2025.

While the import policy was announced in March 2024 followed by a draft notification on guidelines for its implementation, the final guidelines for it were notified in June 2025. Under the policy, companies will be allowed to import up to 8,000 electric four-wheeler units annually at a lower import duty of 15%, against 70-100% currently, provided they commit an investment of ₹4,150 crore for setting up local manufacturing facilities. It must also furnish a bank guarantee of at least ₹4150 crore ($500 million) along with the application. The original equipment manufacturer (OEM) must achieve 25% DVA (domestic value add) within three years and 50% within five years.

Officials said that auto makers were waiting for important Foreign Trade Agreements such as those with the U.S. and European Union to conclude incase those offered attractive concessions. They cited the instance of the FTA with the U.K. as an example, where import duties on U.K.-built vehicles, including electric and conventional cars, are cut from over 100% to about 10%, but only for a limited number of vehicles under an annual quota. Only large engine premium vehicles (petrol above 3000 cc, diesel above 2500 cc), and luxury cars priced above £40,000 (which includes cost, insurance and freight), are eligible for these concessions; mass-market models and lower-priced vehicles remain excluded.

While a representative from Tesla attended only the first meeting of stakeholders held last year after the draft guidelines were issued, “there has been no communication” since between the auto giant and the government, officials said.

In the meantime, Tesla has opened a showroom each in Mumbai and National Capital Region for completely built units.

To a question on whether the government would make tweaks to the scheme to make it more attractive, officials said there were no demands made from auto companies seeking changes to the policy.

Responding to concerns from auto makers on the high investment fee of ₹4,150 crore, the above quoted official dismissed them saying that original equipment manufacturers would simply be diverting the costs incurred on import duty to investments made for local manufacturing. However, the official said some players were concerned over the volume of sales they would have for cars priced above $35,000. 

The tepid response is despite earlier indications from automobile industry executives expressing that global OEMs such as Hyundai Motor India, Kia India, the Volkswagen Group, and Toyota could be keen in the policy. 

While Vietnamese EV maker set up an assembly plant in Thoothukudi and pledged an investment of $500 million it doesn’t qualify for the scheme as investments were made before last year’s draft notification in March.