This document summarizes the Indian Ministry of Heavy Industries' response to Lok Sabha Unstarred Question No. 4145, answered on August 19, 2025, regarding the use of Chinese-made motors in automobiles and related subsidy policies.
The Ministry clarifies that no notification has been issued under the Production Linked Incentive (PLI) Scheme for Automobile and Auto Component Industry (PLI Auto Scheme) or the Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI) allowing automobile firms to use fully built Chinese-made motors to circumvent China's magnet export curbs.
The Ministry outlines eligibility criteria for manufacturers to receive Central assistance under domestic manufacturing policies. Under the PLI Auto Scheme, approved applicants must meet investment and incremental sales thresholds, as well as a minimum Domestic Value Addition (DVA) of 50% to qualify for incentives. To benefit from the SPMEPCI, approved applicants must establish e4W manufacturing facilities in India with a minimum investment of Rs. 4,150 crore, operational within three years of approval, and achieve a minimum DVA of 25% by the third year and 50% by the fifth year.
Finally, the Ministry states that there are no current proposals under consideration to review or revise subsidy policies to further encourage greater domestic content in auto manufacturing.
Key Entities Referenced
Ministry of Heavy Industries: A ministry within the Government of India responsible for the development of the heavy industries sector.
Production Linked Incentive Scheme for Automobile Auto Component Industry: A government scheme (PLI Auto Scheme) to incentivize domestic production in the automobile and auto component industry.
Scheme to Promote Manufacturing of Electric Passenger Cars in India: A government scheme (SPMEPCI) focused on promoting the manufacturing of electric passenger cars within India.
China: Country mentioned in context of Chinese-made motors and export curbs.
Domestic Value Addition: DVA, refers to the minimum percentage of locally sourced components or manufacturing value that a product must have to qualify for incentives under the PLI Auto Scheme and SPMEPCI.
SHRI BHUPATHIRAJU SRINIVASA VARMA: Minister of State for Heavy Industries.
GOVERNMENT OF INDIA
MINISTRY OF HEAVY INDUSTRIES
LOK SABHA
UNSTARRED QUESTION NO. 4145
ANSWERED ON 19.08.2025
ALLOWING AUTOMOBILE FIRMS TO USE CHINESE-MADE MOTORS
4145. SHRI CHAVAN RAVINDRA VASANTRAO:
SHRI DHAIRYASHEEL SAMBHAJIRAO MANE:
SHRI SUDHEER GUPTA:
SHRI MANISH JAISWAL:
Will the Minister of HEAVY INDUSTRIES be pleased to state:
(a) whether the Government has allowed the automobile firms to use fully built Chinese-made
motors in their vehicles to skirt China’s magnet export curbs in order to continue availing
Government Subsidies of Production (SOPs);
(b) if so, the details thereof and the likely impact on manufacturers and their localization;
(c) the safeguards or conditions imposed to ensure that such usage does not compromise national
interests or security;
(d) whether the Government has set any criteria for vehicle manufacturers to be eligible to get
Central assistance or claim benefits under its domestic manufacturing policy and if so, the details
thereof;
(e) whether the Government is considering to review or revise the subsidy policies to encourage
greater domestic content in auto manufacturing; and
(f) if so, the details thereof including the steps taken in this regard?
ANSWER
THE MINISTER OF STATE FOR HEAVY INDUSTRIES
(SHRI BHUPATHIRAJU SRINIVASA VARMA)
(a) to (c): No such notification has been issued by MHI under Production Linked Incentive
Scheme for Automobile & Auto Component Industry (PLI Auto Scheme) and Scheme to
Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI) to allow automobile
firms to use fully built Chinese-made motors in their vehicles to skirt China’s magnet export
curbs.
(d): Under PLI Auto scheme, approved applicants are required to achieve the investment
thresholds, incremental sales thresholds and Domestic Value Addition (DVA) of minimum 50%
for availing incentives under the scheme. To avail the benefits under SPMEPCI, approved
applicants have to set up manufacturing facilities of e-4W in India with a minimum investment
of Rs. 4,150 crore and make the facilities operational within a period of 3 years from the date of
issuance of approval by MHI and achieve minimum DVA of 25% by 3rd year and 50% by 5th
year.
(e) & (f): No such proposal is under consideration.
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