The Ministry of Heavy Industries (MHI) has issued guidelines for its ‘Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI).’

The program aims to enable fresh investments from global manufacturers in the electric vehicle (EV) passenger car segment.

Companies seeking to participate in this program must commit ₹41.5 billion (~$486 million) within three years from the application approval date. This investment will be used to establish manufacturing facilities for electric passenger cars within the country.

To encourage global manufacturers to invest under the program, approved applicants will be allowed to import completely built-in units of e-4Ws (eligible products) with minimum cost, insurance, and a freight value of $35,000. The import will be allowed at a reduced customs duty rate of 15% for five years from the application approval date.

The maximum number of e-4Ws allowed for import at the reduced duty rate will be capped at 8,000 per year. The unutilized annual import limits can carry over to the next year.

The maximum duty forgone per applicant under the program is capped at ₹64.84 billion (~$759.4 million).

The standard operating procedure issued under the production-linked incentives program for automobiles and auto components will be followed to assess the domestic value addition (DVA) of the eligible product. The minimum DVA to be achieved within three years is 25%, and within five years is 50%.

Investments must target domestic manufacturing of eligible products. If the program’s investment is directed towards a brownfield project, there must be a clear physical separation from current manufacturing facilities.

Expenditures incurred on new plants, machinery, equipment, and associated utilities, as well as engineering research and development, would be eligible.

Land expenditure will not be considered. However, buildings of the main plant and utilities will be included as part of the investment, provided they do not exceed 10% of the committed investment.

Charging infrastructure expenses will be regarded as a maximum of 5% of the total committed investment.

Application Process

Applications are open for 120 days. MHI can reopen the application window as needed until June 15, 2026.

Interested applicants must pay a non-refundable application fee of ₹500,000 (~$5,856.27).

Applicants’ global group revenue (from automotive manufacturing) must be at least ₹100 billion (~$1.1 billion), and their global investment or group in fixed assets must be ₹30 billion (~$351.3 million).

MHI first introduced the program in 2024, with the Department of Finance issuing notifications reducing import duties in line with the program’s provisions.

The program aims to enable fresh investments from global manufacturers in the electric vehicle (EV) passenger car segment.

Recently, MHI mandated a 100% domestic content requirement for 18 EV components under the two-wheeler, three-wheeler, and e-bus segments to be eligible for a subsidy under the PM E-Drive program.

EV sales in India reached a record 1.95 million units in 2024, an over 27% growth year-over-year.