EV Push Slows Down: Automakers Hold Back Investments Until India-EU FTA Is Finalised
Minister of State for Heavy Industries Bhupathiraju Srinivasa Varma informed that several companies have indicated they will decide on joining the scheme once the FTA terms are settled.
The scheme to promote manufacturing of electric passenger cars (SPMEPC) is expected to gather momentum only after the India-EU Free Trade Agreement (FTA) is finalised, as global automakers prefer to wait for clarity on the trade deal before committing investments, the Parliament was informed on Tuesday.
In a written reply to Lok Sabha, Minister of State for Heavy Industries Bhupathiraju Srinivasa Varma informed that several companies have indicated they will decide on joining the scheme once the FTA terms are settled.
Despite the October 21 deadline, no automaker submitted an application. Companies told the Government that the uncertainty around the India-EU FTA was a major factor behind their hesitation.
They also raised concerns about restrictions on rare-earth magnets, which may affect their ability to meet Domestic Value Addition (DVA) requirements.
In addition, firms pointed out that the mandated investment levels and timelines under the scheme could be difficult to meet.
The Heavy Industries Ministry said it has carried out extensive outreach to encourage participation.
This included consultations during the scheme’s design, coordination with Invest India and various ministries, and communication through Indian embassies in countries where major global automakers are headquartered.
A recent stakeholder meeting was also held to resolve industry queries after the scheme failed to attract applicants.
Regarding the proposed 15 per cent import duty concession for EVs in exchange for investments of Rs 4,150 crore, the Government clarified that no revisions are being considered at present.
It also said that while it has not formally assessed the impact of the ongoing India-EU negotiations, companies themselves have linked their decisions to the outcome of the trade talks.
The Ministry added that there is currently no plan to reopen the application window or modify the conditions of the SPMEPC scheme.
(This report has been published as part of the auto-generated syndicate wire feed. Apart from the headline, no editing has been done in the copy by ABP Live.)
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