Automakers cite India-EU FTA for ignoring EV incentive scheme

Global automakers have cited ongoing India-EU FTA negotiations and Chinese export restrictions on rare earth magnets as reasons for not participating in India’s SPMEPC, Minister of State for Heavy Industries Bhupathiraju Srinivasa Varma told the Lok Sabha.

• Main announcement/action: Global automakers (OEMs) indicated they may delay a decision on participating in the Program to Promote the Manufacturing of Electric Passenger Cars (SPMEPC) until the India-EU FTA is finalized; the MoS (Minister of State for Heavy Industries) provided this information in a written response to the Lok Sabha.
• Background & scheme details: SPMEPC (established 15 March 2024) permits import of fully assembled electric cars with a minimum CIF value of $35,000 at a concessional import duty of 15% for five years, conditional on companies making a minimum investment of $500 million (over Rs 4,300 crore) to start local manufacturing; automakers also cited investment threshold requirements, timelines, and Chinese restrictions on rare earth magnets affecting DVA targets as concerns.