India strides towards faster EV adoption

Considering the ambitious target set by NITI Aayog for achieving 30% EV penetration in India by 2030
India strides towards faster EV adoption

The ambition of Indian Government to position India as a front-runner in the EV space is not unknown. Rising focus on clean energy initiatives, reduction in carbon footprint (with target to achieve net-zero emissions by 2070 married with national campaign of Make-in-India reinforces the need for strategic initiatives to attract investments and boost domestic demand for EVs.

Considering the ambitious target set by NITI Aayog for achieving 30% EV penetration in India by 2030, Government has already undertaken multiple initiatives such as FAME, PLI schemes (automotive and ACC battery), several state industrial policies, etc. to induce investment and demand for EVs.

In furtherance to above initiatives, the Government recently released scheme for promoting manufacturing of electric passenger cars (‘e-4Ws’) with an aim to attract global EV manufacturers and promote India as a manufacturing destination for E-4Ws. Under this scheme, an applicant would be able to import completely built units of E-4Ws at significantly lower customs duty (up to prescribed limit), in lieu of making minimum investment of $500 Mn and achieving domestic value addition (‘DVA’) for manufacturing E-4Ws in India in a phased manner.


While plain text of the scheme appears self-explanatory, there are several nuances which would merit consideration by prospective applicants, inter alia including:
 


    Given the contours of scheme discussed above, it appears to be a promising initiative to ease Global automakers to enter the Indian market. While the scheme is still in its early stages, it has the potential to be the solution India needs to mark its position as the hub of advanced EV manufacturing. However, success of the scheme would significantly depend upon actual implementation, including ability of companies to comply with the requirements. All in all, it would not be inaccurate to say that EV adoption remains one of the key areas to track while monitoring the India growth story.

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