Under the current policy, automakers are required to achieve a local value addition of 30% for EVs to be eligible for a concessional import duty of 15%. However, this requirement has been a major deterrent for many companies, as they find it difficult to source these critical components locally.
Source:- the times of indiaThe proposed exclusion of batteries, semiconductors, and magnetic parts from the localization norms would be a major relief for these companies. It would allow them to import these components at a lower cost, making their EVs more price competitive in the Indian market.
Source:-stating cashThe move is also expected to encourage more investment in EV manufacturing in India. Currently, there are only a handful of EV manufacturers in the country, and most of them are focused on producing low-cost EVs. The relaxation of local value addition norms could attract more global EV players to India, leading to the development of a more diverse and competitive EV ecosystem.
However, the proposal has also raised concerns among some domestic EV manufacturers. These companies argue that the relaxation will give an unfair advantage to foreign companies, and could jeopardize their own businesses. They are urging the government to reconsider the proposal, or at least provide some form of compensation to domestic EV manufacturers.
The government is likely to take a balanced approach, addressing the concerns of both foreign and domestic EV manufacturers. It is expected to announce a final decision on the proposal in the coming months.
Overall, the proposed relaxation of local value addition norms is a positive step that could boost the EV industry in India. It could attract more investment, lead to the development of more competitive EVs, and ultimately benefit Indian consumers.
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