The global push toward sustainability has put electric vehicles (EVs) at the center of the automotive industry’s transformation. While countries around the world are vying for global EV leadership, India has stepped up with a bold initiative to position itself as a major player in EV manufacturing. On June 24, 2025, the Indian government unveiled an online portal under the Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMPCI). This is more than just a policy update; it’s a strategic move to place India on the global EV map.
What is the SPMPCI Scheme?
The Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMPCI) is an ambitious program introduced by the Ministry of Heavy Industries. It aims to attract both domestic and international automakers to establish EV manufacturing units in India.
At its core, the SPMPCI is designed to achieve two goals:
- Encourage local EV production by providing financial incentives.
- Strengthen India’s supply chain to support sustainable mobility.
The government’s approach is clear and focused. By reducing import duties while enforcing domestic production obligations, SPMPCI aims to balance the integration of global expertise with local industrial growth.
Key Features of the SPMPCI Scheme
Here is a quick snapshot of the SPMPCI’s highlights and requirements that set it apart from conventional incentives.
1. Lower Import Duties
Global automakers can now import up to 8,000 electric passenger vehicles annually at a slashed import duty of 15% compared to the hefty 70-100% previously levied.
2. Domestic Investment Mandates
To avail of these benefits, automakers must commit to investing ₹4,150 crore (~$485.33 million) toward domestic manufacturing facilities.
3. Local Value Addition Rules
The scheme mandates a 25% domestic content requirement within the first three years. Manufacturers must increase this to 50% within five years to remain eligible.
4. Timeline for Manufacturing Operations
Approved companies must establish manufacturing facilities and begin operations within three years of receiving approval under the scheme.
5. Infrastructure Supplementation
The expenditure under the scheme is not restricted to vehicle production alone:
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- Up to 5% of the committed investment can be allocated toward EV charging infrastructure.
- Another 10% can go toward building factory utilities (plant construction, equipment, etc.).
6. Eligibility Criteria
The scheme has set clear thresholds to ensure only serious contenders apply:
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- A global automotive revenue of ₹10,000 crore or more.
- Minimum investments of ₹3,000 crore in fixed assets as reflected in the latest audited financial statements.
Why is This Significant for EV Adoption in India?
1. Greater Accessibility for EV Buyers
Lower import duties pave the way for more affordable electric cars, addressing one of the key barriers to EV adoption in India.
2. Boost for Local Manufacturing
Requiring manufacturers to source locally (through domestic value addition) will enhance India’s industrial capabilities while creating jobs and promoting technology transfer.
3. Attracting Global Leaders
The dynamic ecosystem created by this policy is already generating interest from global giants, including Tesla and other international automakers.
Industry Implications
The SPMPCI is a clear signal that India is committed to being an EV manufacturing hub. Here’s what the future might hold for key stakeholders.
Impact on Automakers
Automakers have a lucrative opportunity to establish a manufacturing footprint in India. The reduced import tariffs serve as an incentive for companies to enter the Indian market, provided they meet local manufacturing deadlines and conditions.
Supply Chain Growth
The high DVA percentages indicate that suppliers of EV components are poised to benefit. Increased demand for local sourcing could spawn partnerships between multinational firms and Indian suppliers.
Environmental Perspective
By adopting cleaner technology for passenger cars, SPMPCI aligns with India’s broader sustainability goals, notably reducing greenhouse gas emissions and urban air pollution.
Challenges to Address
Despite the merits of SPMPCI, its success depends on resolving a few critical challenges upfront.
- Land Restrictions: Expenses related to land acquisition are not eligible under the scheme. This might dissuade some players from large-scale commitment.
- Global Geopolitics: Automotive firms from countries sharing land borders with India, such as China, are ineligible, which might limit competition.
- Execution Timeline: Three years is a relatively short window for global players to establish advanced manufacturing facilities.
The Road Ahead
The SPMPCI portal, opened on June 24, 2025, will accept applications until October 21, 2025, with additional windows outlined through March 2026 if needed.
Looking ahead, the scheme’s conditional focus on long-term investment and domestic value addition offers a clear direction for the future of Indian mobility. With incentives for both production and infrastructure, India is laying the foundation for a robust EV ecosystem.
Whether you’re an automaker, investor, or consumer, the next few years will likely see dramatic changes in how India produces, sells, and drives electric vehicles.
FAQs: Frequently Asked Questions
1. What is the SPMPCI policy?
A. The SPMPCI (Specific Policy for Manufacturing and Promotion of Clean Innovation) is India’s government initiative aimed at boosting electric vehicle (EV) adoption. It includes incentives for domestic manufacturing and reduces import taxes on EVs.
2. How does the SPMPCI policy benefit manufacturers?
A. Manufacturers benefit from reduced import duties on EVs and components as well as support for setting up local production facilities, encouraging innovation and investment in India’s EV sector.
3. How will the policy impact EV buyers in India?
A. The policy is expected to lower the overall cost of EVs, making them more affordable for Indian consumers. It also aims to increase the availability and variety of EV models in the market.
4. Does the policy address EV infrastructure?
A. Yes, the SPMPCI policy includes measures to improve charging infrastructure across the country, ensuring a smoother transition to electric mobility.
5. Which international companies are likely to benefit from the reduced import taxes?
A. Global automakers with EV portfolios, such as Tesla, BYD, and Hyundai, are expected to benefit from the reduced import duties, provided they align with the domestic production requirements outlined in the policy.
Final Thoughts
The Indian government’s SPMPCI initiative underscores its commitment to an electrified future. Potential automakers have unprecedented opportunities to influence the trajectory of sustainability, mobility, and industrial growth.
For consumers, the scheme hints at an exciting future where EVs are within reach while promoting greener cities for all.
By creating clear incentives for manufacturers to invest in innovation and infrastructure, the SPMPCI positions India as a serious contender in shaping global EV trends.
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