The Union Government has approved a scheme to promote electric vehicle (EV) manufacturing in India and to attract investments in the e-vehicle space by key global manufacturers on March 15.

EV makers are required to make a minimum investment of Rs 4,145 crore with no cap on maximum investment. The Investment commitment will have to be backed up by a bank guarantee in lieu of the custom duty forgone.

“This will provide Indian consumers with access to latest technology, boost the Make in India initiative, strengthen the EV ecosystem by promoting healthy competition among EV players leading to high volume of production, economies of scale, lower cost of production, reduce imports of crude Oil, lower trade deficit, reduce air pollution, particularly in cities, and will have a positive impact on health and environment,” the press release said.

Companies that meet these requirements will be allowed to import 8,000 EVs a year at a lower import duty of 15% on cars costing $35,000 and above. India levies a tax of 70% or 100% on imported cars depending on their value.

The move is expected to provide access to latest technology and enhance the EV ecosystem and support the Make in India initiative, the statement issued by the government said. The duty waiver on EVs, which can be imported is capped at the annual PLI incentive (Rs 6,484 crore) or the investment made by the entity, whichever will be lower.