1. Home
  2. Blog
  3. UPSC

Govt to Promote Manufacturing of Electric Passenger Cars

Why is it in the news?

  • The Ministry of Heavy Industries (MHI) is spearheading the initiative to promote the manufacturing the electric passenger cars.

 

More about the news

  • The Project Management Agency (PMA) will play a pivotal role in providing secretarial, managerial, and implementation support, as well as carrying out additional responsibilities assigned by the Government of India (GoI).

Eligibility Criteria:

  • Investment Requirements: Companies interested in availing the benefits of the scheme must commit a minimum investment of Rs 4150 Crore (USD 500 million) within a three-year window. There is no cap on the maximum investment.
  • Domestic Value Addition (DVA): Manufacturers must adhere to DVA criteria, requiring a 25% value addition within three years and 50% within five years from the date of issuance of approval by MHI/PMA.
  • Bank Guarantee: A bank guarantee will only be returned when the 50% DVA mark is attained, along with the investment of at least Rs 4,150 crore, or to the extent of duty foregone in five years, whichever is higher.
  • Performance Criteria: All electric passenger vehicles manufactured under this scheme must meet the performance criteria outlined in the Production Linked Incentive (PLI) Auto scheme.
  • Tenure: The scheme will operate for a tenure of five years, subject to any alterations notified by the Government of India.

 

Rationale of the Scheme

  • Attract Investments: By offering incentives and creating a conducive environment, the scheme aims to attract investments from global Electric Vehicle (EV) manufacturers into the Indian market.
  • Position India as a Manufacturing Hub: The scheme seeks to position India as a preferred manufacturing destination for EVs, thereby bolstering the country’s reputation in the global automotive industry.
  • Stimulate Competition: By encouraging multiple EV players to establish manufacturing facilities in India, the scheme aims to foster healthy competition.
  • Reduce Oil Dependency: The promotion of EV manufacturing aligns with India’s goals of reducing its dependency on crude oil imports, thereby enhancing energy security and reducing the carbon footprint.
  • Generate Employment: The establishment of manufacturing facilities and ancillary industries is anticipated to generate significant employment opportunities across various sectors of the economy.
Other Initiatives to Promote EVs

·       Faster Adoption and Manufacturing of EVs (FAME) India: Launched in two phases, in 2015 and 2019 respectively, FAME India offers incentives for the adoption of electric vehicles and the development of charging infrastructure.

·       PLI Scheme for Automobile and Automotive Components (PLI-Auto): Introduced in 2021, this scheme provides financial incentives to promote domestic manufacturing and attract investments into the automotive manufacturing value chain.

·       EV 30@30 Initiative: With a goal to achieve at least 30% new EV sales by 2030, this initiative aims to expedite the deployment of electric vehicles across the country.

 

Get free UPSC Updates straight to your inbox!

Discover more from AMIGOS IAS

Subscribe now to keep reading and get access to the full archive.

Continue reading