New Delhi, June 2: On Monday, the government announced new guidelines aimed at attracting fresh investments from international manufacturers in the electric vehicle (EV) sector, positioning India as a key player in global e-vehicle production.

To incentivize global companies like Tesla to participate in this initiative, approved applicants will be permitted to import fully assembled electric four-wheelers with a minimum CIF (cost insurance and freight) value of $35,000, benefiting from a reduced customs duty of 15% for five years following the approval of their application.

Each approved applicant must commit to a minimum investment of ₹4,150 crore as part of the scheme's requirements.

The scheme will limit the number of electric four-wheelers that can be imported at the reduced duty rate to 8,000 units annually, with provisions for carrying over any unused import quotas.

As per the guidelines, the total duty exemption per applicant will be capped at ₹6,484 crore or the committed investment of ₹4,150 crore, whichever is lower.

The Standard Operating Procedure (SOP) under the Production Linked Incentive (PLI) Scheme for the Automobile and Auto Component sector will be utilized to evaluate the Domestic Value Addition (DVA) of eligible products.

Certification of DVA for products manufactured in India by approved applicants will be conducted by testing agencies recognized by the Ministry of Heavy Industries.

Investments must focus on domestic manufacturing of eligible products. If the investment pertains to a brownfield project, a clear physical separation from existing manufacturing facilities is required, according to the notification.

Eligible expenditures include costs related to new plants, machinery, equipment, and engineering research and development (ER&D). However, land costs will not be included, although the construction of the main plant and utilities can be counted as part of the investment, provided it does not exceed 10% of the total committed investment.

Additionally, expenses for charging infrastructure can be included up to a maximum of 5% of the committed investment.

Applicants must secure their commitment to establish manufacturing facilities and meet DVA requirements with a bank guarantee from a scheduled commercial bank in India, equivalent to the total duty exemption or ₹4,150 crore, whichever is greater, throughout the scheme's duration.

This initiative aims to attract global EV manufacturers, enhance India's status as a manufacturing hub for electric vehicles, create jobs, and support the 'Make in India' initiative, as stated by officials.

This significant program aligns with India's objectives of achieving net-zero emissions by 2070, promoting sustainable mobility, stimulating economic growth, and minimizing environmental impact, thereby establishing India as a leading global destination for automotive manufacturing and innovation.