The Center confirmed that the momentum for the electric car manufacturing project will only pick up after the finalization of the India-EU free trade agreement, with global automakers waiting for clarity before committing investments.
New Delhi: The government expects its Passenger Electric Vehicle Manufacturing Program (SPMEPC) to gain momentum only after the finalization of the India-EU Free Trade Agreement (FTA) as several global automakers are delaying investments until the trade deal is clear, Parliament was informed on Tuesday.
In a written reply in the Lok Sabha, Minister of State for Heavy Industries Bhupathiraju Srinivasa Varma said several companies had indicated that they would take a decision to participate in the scheme once the terms of the FTA were settled.
Despite the October 21 deadline, no automaker submitted an application. According to the companies, uncertainty surrounding the negotiations between India and the EU was one of the main reasons for the delay.
Manufacturers have also raised concerns about restrictions on rare earth magnets, which could make it difficult to meet domestic value added (DVA) requirements. Furthermore, the investment thresholds and deadlines stipulated under the program were reported to be demanding.
The ministry said it had undertaken extensive outreach activities to boost participation, including consultations during the design phase of the program, coordination with Invest India and other ministries, and communication with foreign automakers through Indian embassies. A stakeholder meeting was also held recently to answer questions from the industry after the program failed to attract applicants.
Responding to questions on the proposed concession of 15 per cent import duty for electric vehicles in return for an investment commitment of ₹4,150 crore, the government clarified that no revision of the scheme is currently under consideration.
He added that while he has not formally assessed the impact of the ongoing trade negotiations between India and the EU, companies themselves have linked their investment decisions to the outcome of the FTA.
The ministry also confirmed that there are currently no proposals to reopen the application window or change the terms of the SPMEPC program.
IANS
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