India Business Journal - New policy SPMEPCI unveiled for manufacturing electric four-wheelers

INDUSTRY

New policy SPMEPCI unveiled for manufacturing electric four-wheelers

IBJ Bureau
Jun 03, 2025

The Ministry of Heavy Industries has announced detailed guidelines for its electric car (e-car) manufacturing policy, the Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI). The government had earlier approved the policy and was first announced on March 15, 2024.

According to SPMEPCI, an automobile manufacturer is required to invest at least Rs 4,150 crore (around $500 million) to set up a manufacturing plant in India. Under this scheme, the company can directly import completely-built units of (CBUs) electric four-wheelers priced at least $35,000 to avail themselves of a reduced Customs Duty of 15 per cent for five years. A company can import 8,000 units per year at the lower tariff rates.

Mr Kumaraswamy said: “As a safeguard, companies must furnish a bank guarantee equal to the greater of Rs 4,150 crore or the total Customs Duty they are exempted from over the period of the scheme. This guarantee must remain valid throughout the tenure of the scheme and will serve as a financial assurance of compliance with investment and localisation targets.”

The companies must achieve at least 25 per cent of local components within three years and 50 per cent within five years, based on the standards set under the PLI Auto Scheme. The total benefit under the scheme is capped by either the committed investment or a maximum duty foregone limit of Rs 6,484 crore, whichever is lower.