Article Title: How is India planning to localise EV manufacturing
09-06-2025
Economy Current Affairs Analysis
Context
• More than a year since it was announced, the Ministry of Heavy Industries (MHI) notified guidelines of the Scheme to Promote Manufacturing of Electric Passenger Cars in India.
• At the centre of the notified policy is the provision to reduce customs duty on the import of ready-to-ship completely assembled electric four-wheelers from the present 70-100% to 15%. This would apply to all vehicles valued at $35,000 for a period of five years.
• However, this would be subject to the manufacturer investing a minimum of ₹4,150 crore over the next three years.
• They would also be expected to build infrastructure and facilities as to enable 25% of the overall manufacturing activity to be undertaken domestically within three years, and 50% within five years.
• The MHI specifies that a maximum of 8,000 vehicles can be imported at the reduced duty rate in a year.
• China as the leading manufacturer of EVs accounted for 70% of the global manufacturing in 2024.
• According to data compiled by FADA, EVs accounted for 7.8% of all vehicles sold in FY 2025.
• This was predominantly led by electric three-wheelers (at 57% in its category), followed by two-wheelers (6.1%), passenger vehicles (2.6%) and commercial vehicles (0.9%).
• Also imperative to note that the International Energy Association (IEA) attributed India as the world’s largest market for electric three-wheelers in 2024
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