India's SPMEPCI Guidelines Imminent: Boost for EV Market Amid US Trade Talks
The Indian government is set to unveil the SPMEPCI guidelines in a few weeks, paving the way for electric vehicle (EV) manufacturers to enter the market. This comes amidst potential changes in India's trade policies with the US, which could impact the USCIS sector.
The Scheme for Promotion of Manufacturing of Electric Passenger Cars in India (SPMEPCI) has been in the works but awaits final approvals. Once launched, it will establish the operational framework and open the application process for EV manufacturers.
The original SPMEPCI required a substantial minimum investment of Rs 4,150 crore and offered reduced import duties of 15 per cent for qualified manufacturers. However, the incentive structure may be revised following the finalisation of the India-US bilateral trade agreement.
India's high import tariffs, including up to 100 per cent on automobiles, have been a significant barrier for companies like Tesla looking to enter the Indian market. President Trump has consistently criticised these high duties, arguing they disadvantage US exports.
The SPMEPCI mandates a minimum of 25 per cent domestic value addition within three years, increasing to 50 per cent after five years. This is aimed at promoting local manufacturing and reducing dependence on imports.
The upcoming launch of the SPMEPCI guidelines is expected to stimulate the EV manufacturing sector in India. However, the final shape of these policies remains subject to ongoing trade negotiations with the US, which could potentially lower India's automotive import duties.
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