Minister of Heavy Industries, H.D. Kumaraswamy, has announced that several global automobile companies have expressed interest in manufacturing electric vehicles (EVs) in India. These companies include Mercedes-Benz, Skoda-Volkswagen, Hyundai, and Kia. All are considering potential investments under the Indian government's "Electric Passenger Car Manufacturing Promotion Scheme."
The detailed rules and guidelines for the EV scheme, notified on March 15, 2024, were publicly released in June 2025. The scheme aims to boost domestic EV manufacturing.
According to the Union Minister, this scheme will incentivize both foreign and domestic companies to manufacture electric cars in India. This is expected to increase investment, create jobs, and promote environmentally friendly technology.
Key Highlights of the Scheme
Government officials state that the application process will begin within the next one to two weeks. Foreign companies fulfilling the specified criteria will be eligible for a reduced 15% customs duty on completely built-up (CBU) electric vehicles imported into India.
However, this concession will only apply to vehicles with a CIF (Cost, Insurance, and Freight) value of at least US$35,000.
Approved companies will be required to invest a minimum of ₹4,150 crore in India as per the scheme's terms. The application deadline is set at 120 days from the notification date. Additionally, the government retains the right to accept applications as needed until March 15, 2026.
Boosting Domestic Refinement and Investment
The new scheme aims not only to increase EV manufacturing within India but also to promote local employment and technical skills. Incentives such as reduced tariffs and mandatory investments are intended to attract foreign companies to establish manufacturing bases in India, thereby strengthening the country's 'Make in India' initiative.
Tesla's India Status
Meanwhile, Industry Minister Kumaraswamy clarified Tesla's position. He stated that the American electric car manufacturer currently has no plans to establish vehicle manufacturing in India. However, the company is considering opening showrooms in the Indian market.
Former US President Donald Trump's comments, suggesting that a Tesla car plant in India could be "unfair" to the US due to potential tariff avoidance, have also been discussed in this context.
