No disruption for domestic companies due to new EV manufacturing policy, says DPIIT Secretary

"It is in the public interest to bring in high-quality manufacturers to India with proven technologies. There was a feeling that tariffs were too high in India and some companies wanted to test the market before manufacturing. We have created a fine balance between the demands of global electric vehicle makers and giving the local electric vehicle ecosystem a boost. The policy will ensure both Make in India and our energy transition goals," he said.

The official emphasised that global EV makers have not been given a free pass to enter India but have to follow stringent performance criteria. If the company fails to meet the investment criteria or localisation targets, then their bank guarantees would be forfeited, he said.

Responding to concerns raised by Indian car makers the secretary said, "The tariff benefits are for a very limited period to minimise impact on local industry. 15% is the global average tariff on auto vehicles. Europe has 10% tariffs on imported cars, US tariffs are 2% and even China is at 15%.

The concessions are for a limited period of three years and that too in a segment where most domestic car makers don’t operate. We have really ensured that disruption for domestic manufacturers is a bare minimum."

The new electric vehicle manufacturing policy allows a car maker to import 8,000 cars per year. The concessional 15% duty will apply to cars costing $35,000 or more which is equivalent to ₹29 lakh. The secretary said the Indian government is welcoming all EV makers with calibrated interventions without any fresh budgetary outlay.

Recently, Vietnam’s electric vehicle maker Vinfast announced plans to set up manufacturing in Tamil Nadu. Elon Musk’s Tesla has been contemplating entering the Indian market and had previously flagged India’s high tariffs as a deterrent.