{"id":49606,"date":"2025-06-09T10:03:10","date_gmt":"2025-06-09T04:33:10","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=49606"},"modified":"2025-06-09T12:14:33","modified_gmt":"2025-06-09T06:44:33","slug":"indias-ev-localisation-policy-balancing-imports-and-industrial-growth","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/indias-ev-localisation-policy-balancing-imports-and-industrial-growth\/","title":{"rendered":"India\u2019s EV Localisation Policy: Balancing Imports and Industrial Growth"},"content":{"rendered":"<h2>India\u2019s EV Localisation Policy Latest News<\/h2>\n<ul>\n<li>The Ministry of Heavy Industries notified guidelines of the Scheme to Promote Manufacturing of Electric Passenger Cars in India.<\/li>\n<\/ul>\n<h2>India\u2019s Strategy to Accelerate EV Manufacturing<\/h2>\n<ul>\n<li>India has taken a bold step to bolster its electric vehicle (EV) sector by unveiling a policy aimed at encouraging domestic manufacturing while permitting limited imports of fully built electric cars at reduced import duties.\u00a0<\/li>\n<li>This Scheme to\u00a0<strong>Promote Manufacturing of Electric Passenger Cars<\/strong>, announced by the Ministry of Heavy Industries (MHI), is part of a broader effort to enhance clean mobility and industrial competitiveness.<\/li>\n<\/ul>\n<h2>Key Provisions of the Scheme<\/h2>\n<ul>\n<li>The central feature of the policy is a\u00a0<strong>sharp reduction in customs duty on completely built units (CBUs) of electric cars, from the current 70-100% to just 15%<\/strong>.\u00a0<\/li>\n<li>This duty cut applies to vehicles priced at or above $35,000 (approximately Rs. 29.75 lakh) for a five-year period. However, this\u00a0<strong>benefit is contingent on manufacturers investing a minimum of Rs. 4,150 crore in India over three years<\/strong>.<\/li>\n<li>These investments must result in domestic value addition (DVA) of at least 25% within three years, increasing to 50% by the fifth year.\u00a0<\/li>\n<li>A maximum of 8,000 vehicles can be imported annually under the concessional duty regime, and the total foregone customs duty is capped at Rs. 6,484 crore.<\/li>\n<li>MHI estimates that an imported EV under this scheme would incur a landing cost of Rs. 36 lakh, significantly lower than before.<\/li>\n<\/ul>\n<h2>Assessing Ecosystem Impact<\/h2>\n<ul>\n<li>The policy aims to strike a balance between short-term affordability for Indian consumers and long-term self-reliance in manufacturing.\u00a0<\/li>\n<li>According to FADA data for FY 2025,\u00a0<strong>EVs made up 7.8% of total vehicle sales, with three-wheelers leading at 57% within their segment<\/strong>, followed by two-wheelers (6.1%), passenger vehicles (2.6%), and commercial vehicles (0.9%).<\/li>\n<li>The\u00a0<strong>International Energy Agency (IEA) identified India as the largest global market for electric three-wheelers in 2024<\/strong>, underscoring the importance of focusing not only on private four-wheelers but also on mass and last-mile mobility.<\/li>\n<li>Critics, however, caution that the\u00a0<strong>scheme could dilute India&#8217;s domestic manufacturing ambitions if foreign firms are not compelled to transfer core technologies<\/strong>. Countries often resist exporting their technological edge, potentially reducing India to a component assembly hub.<\/li>\n<li>Another critic emphasized the importance of innovation, R&amp;D, and skilling, elements that powered China and South Korea&#8217;s emergence as global EV leaders. Without these, India may fail to build a truly indigenous ecosystem.<\/li>\n<\/ul>\n<h2>Concerns Over Industrial and Employment Policy<\/h2>\n<ul>\n<li>Indian EV manufacturers, notably\u00a0<strong>Tata Motors<\/strong>\u00a0and\u00a0<strong>Mahindra<\/strong>, have expressed reservations about the scheme.\u00a0<\/li>\n<li>In December 2023, Tata opposed Tesla\u2019s demand for lower import duties, arguing that such a move would disrupt an investment climate based on a stable, protectionist tax regime.<\/li>\n<li>IEA data revealed that over 80% of electric cars produced in India in 2024 came from local manufacturers, while Chinese imports contributed less than 15% to EV sales, thanks in part to the earlier high-duty barriers and availability of affordable domestic options.<\/li>\n<li>Analysts argue that the new policy may tilt the scale in favour of foreign capital, thereby impacting domestic players and job creation.\u00a0<\/li>\n<li>As EVs typically require fewer moving parts than traditional internal combustion engines, the shift could also mean fewer jobs in traditional manufacturing sectors unless accompanied by new skilling initiatives.<\/li>\n<li>Furthermore, S&amp;P Global Mobility has pointed out that\u00a0<strong>India\u2019s continued reliance on imported batteries and components, along with the high upfront cost of EVs<\/strong>\u00a0(20\u201330% more than ICE vehicles), remains a barrier to mass adoption and localisation.<\/li>\n<\/ul>\n<h2>Path Forward<\/h2>\n<ul>\n<li>Experts suggest that India\u2019s EV roadmap must be reoriented toward building domestic capacity, fostering innovation, and ensuring broad-based industrial growth.\u00a0<\/li>\n<li>Rather than focusing primarily on attracting foreign OEMs, policies should invest in research institutes, encourage public sector participation, and fund start-ups in the EV supply chain.<\/li>\n<li>A critical challenge will be to integrate India&#8217;s climate commitments with its manufacturing strategy.\u00a0<\/li>\n<li>As India targets net-zero emissions by 2070, it must simultaneously expand clean mobility options and ensure they are accessible, affordable, and built with local value addition.<\/li>\n<\/ul>\n<h2>India EV Manufacturing Policy FAQs<\/h2>\n<p><strong>Q1.\u00a0<\/strong>What is the core provision of India\u2019s new EV manufacturing scheme?<\/p>\n<p><strong>Ans.<\/strong>\u00a0The policy allows import of electric cars at 15% duty if the manufacturer invests \u20b94,150 crore and meets localisation targets.<\/p>\n<p><strong>Q2.\u00a0<\/strong>How many EVs can be imported under the scheme annually?<\/p>\n<p><strong>Ans.<\/strong>\u00a0A maximum of 8,000 electric vehicles can be imported per year at the reduced duty rate.<\/p>\n<p><strong>Q3.\u00a0<\/strong>What localisation targets are set for EV manufacturers?<\/p>\n<p><strong>Ans.<\/strong>\u00a0Manufacturers must achieve 25% domestic value addition in three years and 50% in five years.<\/p>\n<p><strong>Q4.\u00a0<\/strong>Why are Indian automakers opposing the scheme?<\/p>\n<p><strong>Ans.<\/strong>\u00a0Domestic players like Tata fear reduced import duties could disrupt the investment climate and harm local industries.<\/p>\n<p><strong>Q5.\u00a0<\/strong>How does the policy align with India\u2019s EV and climate goals?<\/p>\n<p><strong>Ans.<\/strong>\u00a0The policy aims to boost clean mobility while encouraging foreign investment, but concerns remain over technology transfer and job creation.<\/p>\n<p><strong>Source:\u00a0<\/strong><a href=\"https:\/\/www.thehindu.com\/business\/Industry\/what-is-indias-latest-approach-to-localising-ev-manufacturing\/article69668704.ece\" target=\"_blank\" rel=\"nofollow noopener\">TH<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>India\u2019s new EV manufacturing policy cuts import duties to 15% on certain electric vehicles, aiming to spur localisation through phased domestic investments and manufacturing targets.<\/p>\n","protected":false},"author":8,"featured_media":49610,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[762,60,761,760],"class_list":{"0":"post-49606","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"tag-india-ev-manufacturing-policy","9":"tag-mains-articles","10":"tag-upsc-currrent-affairs","11":"tag-upsc-mains-currrent-afffairs","12":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/49606","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=49606"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/49606\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/49610"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=49606"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=49606"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=49606"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}