**Executive Summary**
This document is the answer to Unstarred Question No. 435 in Lok Sabha, answered on December 2, 2025, regarding the EV Import Policy and lack of industry participation in the Scheme to Promote Manufacturing of Electric Passenger Cars (SPMEPC). The Minister of State for Heavy Industries addresses the reasons for the scheme's failure to attract applicants by the October 21 deadline, steps taken to engage auto manufacturers, and whether the 15% duty concessions are sufficient. There are no plans to reopen the application window currently.
**Key Points / Main Content**
* **Reasons for Non-Submission of Applications by OEMs:**
* Participation in the SPMEPC scheme is contingent upon the finalization of the ongoing India-EU FTA negotiations.
* Restrictions on rare earth magnets could affect the achievement of Domestic Value Addition (DVA) targets.
* Threshold investment requirements and timelines may pose a challenge.
* **Government Efforts to Engage Auto Manufacturers:**
* Extensive stakeholder outreach undertaken by the Ministry of Heavy Industries (MHI), including consultations during scheme formulation.
* Notices inviting applications were circulated to relevant embassies.
* Engagement of Invest India, Ministry of External Affairs, Department of Commerce, and State/UT Governments to promote and create awareness.
* Stakeholder consultations were held with OEMs to address queries.
* **Duty Concessions:**
* No adjustments to duty concessions (15% for EV imports in exchange for local manufacturing investment of Rs. 4,150 crore) are presently under consideration.
* **Impact of India-EU Trade Negotiations:**
* The Government has not assessed the impact of ongoing India-EU FTA negotiations on automakers' interest.
* OEMs may take decisions regarding participation in the scheme post-finalization of the India-EU FTA.
* **Reopening Application Window:**
* No proposal to reopen the application window is presently under consideration.
**Impact Analysis**
**OEMs (Original Equipment Manufacturers)**
* **Impact:** The OEMs are directly impacted by the conditions and requirements of the SPMEPC scheme. Their participation is contingent upon the finalization of the India-EU FTA and the resolution of concerns regarding rare earth magnets and investment thresholds.
* **Action Required:** OEMs may decide to participate in the Scheme post finalization of the India-EU FTA.
**Government of India (Ministry of Heavy Industries, etc.)**
* **Impact:** The Government is responsible for the success and implementation of the SPMEPC scheme and is therefore directly affected by issues impacting industry participation.
* **Action Required:** Continue outreach efforts to address OEM concerns.
**Ministry of External Affairs, Department of Commerce, and State/UT Governments**
* **Impact:** These departments are engaged in promoting and creating awareness about the SPMEPC scheme.
* **Action Required:** Continue to promote the scheme and address any queries.
Key Entities Referenced
Scheme to Promote Manufacturing of Electric Passenger Cars (SPMEPC): A government scheme aimed at promoting the manufacturing of electric passenger cars in India.
Ministry of Heavy Industries: The primary government ministry responsible for overseeing and implementing policies related to the heavy industry sector, including the SPMEPC scheme.
India-EU FTA negotiations: Ongoing trade negotiations between India and the European Union, the finalization of which is a contingency for automotive OEMs to participate in SPMEPC.
GOVERNMENT OF INDIA
MINISTRY OF HEAVY INDUSTRIES
LOK SABHA
UNSTARRED QUESTION NO. 435
ANSWERED ON 02.12.2025
EV IMPORT POLICY AND LACK OF INDUSTRY PARTICIPATION
435. SHRI MANICKAM TAGORE B:
SHRI VIJAYAKUMAR ALIAS VIJAY VASANTH:
SHRI SURESH KUMAR SHETKAR:
Will the Minister of HEAVY INDUSTRIES be pleased to state:
(a) the reasons due to which the Scheme to Promote Manufacturing of Electric Passenger Cars
(SPMEPC) failed to attract any applicants before the October 21 deadline;
(b) the steps taken by the Government to engage auto manufacturers for participation in the SPMEPC
scheme and details of the feedback received from the industry;
(c) whether the proposed duty concessions (15%) for EV imports in exchange for local
manufacturing investment of Rs. 4,150 crore are sufficient to attract manufacturers, and if not,
whether any adjustments are being considered;
(d) whether the Government has assessed the impact of the ongoing India-EU trade negotiations on
auto-makers’ interest in this scheme and the manner in which it affects the policy’s implementation
timeline; and
(e) whether there are plans to reopen the application window and if so, the details of revised timeline
and conditions for participation?
ANSWER
THE MINISTER OF STATE FOR HEAVY INDUSTRIES
(SHRI BHUPATHIRAJU SRINIVASA VARMA)
(a): In the recent Stakeholders’ meeting with automobile OEMs, the following reasons have been
cited by the OEMs for non-submission of application before the October 21 deadline:
i.The decision to participate in the scheme is contingent upon finalization of the ongoing India–
EU FTA negotiations.
ii.Restrictions on rare earth magnets may affect the achievement of DVA targets.
iii.Threshold investment requirements and timelines may pose a challenge.
(b): MHI has undertaken extensive stakeholder outreach to encourage participation in this
scheme including consultations during scheme formulation, circulation of notice inviting
applications to relevant embassies (of the countries where headquarters of global automobile OEMs
are located), engagement of Invest India, Ministry of External Affairs, Department of Commerce,
and State/UT Governments for promotion and creating awareness about the scheme through various
platforms and investment facilitation channels. A stakeholder consultation was also held recently
with the OEMs to discuss the way forward and address industry queries. The feedback received
from the industry is as given in reply to part (a).-2-
(c): No such proposal is presently under consideration.
(d): No such assessment has been made by the Government. However, during recent Stakeholder
consultations, OEMs have conveyed that they may take decision regarding participation in the
Scheme post finalization of the India-EU FTA.
(e): No such proposal is presently under consideration.
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