Achi news desk-
The government will soon publish the guidelines for the electric vehicle policy, which was approved by the government on March 15
The Indian government is in the final stages of formulating and formulating guidelines for the implementation of the new electric vehicle (EV) policy, which signals a commitment to promoting electric mobility and creating a favorable environment for the growth of the electric industry in India.
“The guidelines are expected in the next three to four weeks… Some of the original equipment manufacturers (original equipment manufacturers) asked if brownfields can be counted in the policy to receive the benefits, as part of the definition of the investment, so this will be discussed further while carrying out the guidelines,” said an official on the matter. without naming companies.
According to sources, the manufacturers’ request to include brownfields in addition to greenfields in the definition of investment probably stems from their desire to maximize the benefits within the government’s electric vehicle (EV) policy. The request reflects the manufacturers’ efforts to leverage existing assets and infrastructure to take advantage of the opportunities presented by the government’s EV policy, and ultimately contribute to the growth of the country’s electric vehicle industry.
Brownfield sites are sites that once hosted industrial facilities, commercial buildings, or residential buildings that are now vacant, abandoned, or underutilized. Greenfield sites have never been developed or built on.
The official also noted that in theory, providing benefits based on brownfields would not be possible. They stressed that original equipment manufacturers (OEMs) would have to set up a separate plant to be eligible for the 25% local valuation allowance (DVA) for the first three years.
The policy notice outlines certain financial requirements and incentives aimed at encouraging companies to invest in EV manufacturing facilities in India.
Below are the key points of investments
- Minimum investment requirement: A minimum investment threshold of ₹4,150 crores (about $500 million) for companies wishing to set up manufacturing facilities in India and start commercial production of EVs. To ensure that companies make significant commitments to the Indian market and are eligible for the incentives provided under the policy.
- Local value added (DVA) objectives: Objectives to achieve local value addition (DVA), which refers to the percentage of locally sourced components used in the production process. Specifically, companies are expected to reach a DVA level of 25% in the third year and 50% in the fifth year of operation.
- Customs incentives: To facilitate the achievement of the DVA targets, the government has approved a 15% duty applicable on completely knocked down (CKD) units.
The policy announcement aims to attract significant investment in EV manufacturing, incentivize domestic manufacturing through DVA targets, and provide tariff incentives to support the growth of the electric vehicle industry in India.
All the established global players like Mercedes-Benz, BMW Group, Audi, Hyundai Motor, Jaguar Land Rover and Volkswagen Group and newcomers like VinFast, which is setting up a facility in Tamil Nadu, and Tesla, which is currently looking for land in the country, stand to benefit from the program as well, as they stand on The criteria for CKD units according to an industry analyst.
Posted: April 30, 2024, 7:18 PM IST
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