The government is working on final guidelines for its electric vehicle (EV) manufacturing incentive scheme, and it may allow foreign carmakers like Tesla to test the market before committing to local production, The Economic Times reported.
The Scheme to Promote Manufacturing of Electric Passenger Cars in India (SMEC), announced in March 2024, is yet to take effect.
Government officials quoted in the report said the guidelines would be finalised within the next two weeks and announced next month.
The application window could stay open for 120 days or longer, and companies may be allowed to apply multiple times.
This means an EV maker could start selling in India now and apply for incentives later if they decide to invest.
Tesla, which has been exploring an entry into the country, is looking for showroom space and hiring staff, but it hasn’t made any firm manufacturing commitments yet.
In fact, a Bloomberg report indicated that Tesla is set for India entry with first EV shipment in coming months.
In a relief for global carmakers already operating in India, the government may also count investments in EV assembly lines within existing factories as eligible for incentives.
Indian economy to grow at 6.3% in Q3: MC Poll
The Indian economy likely grew at a faster clip of 6.3 percent in the third quarter of FY25 from 5.4 percent in the previous quarter, buoyed by rural recovery and a capex push from the Centre, a Moneycontrol poll of 18 economists has said.
“The improvement is led by revival in rural demand and rise in Central government capital expenditure. Urban demand is also showing some signs of improvement but the recovery remains relatively softer than rural demand,” said Gaura Sengupta, chief economist, IDFC First Bank.
Fast-moving indicators also pointed to a recovery in the October-December period after a disappointing second quarter when growth slipped to a near two- year low, experts said.
“Several high-frequency indicators, such as passenger vehicle sales, petrol consumption, domestic air passenger traffic and central government capital expenditure have shown improvement in Q3 compared to the previous quarter,” Rajani Sinha, chief economist, CareEdge, said.