India Is Confident More Foreign Players Will Enter the Country's EV Market Due to New EV Policy Measures

By Trisha Andrada

Apr 26, 2024 07:31 AM EDT

The Department of Promotion of Industry and Internal Trade in India has expressed confidence that the country's new electric vehicle (EV) policy measures, unveiled last month, will attract and allow more global firms to enter the market.

eve manufacturing — (Photo : Jens Schlueter/Getty Images)

India Adopts New EV Measures to Boost Market

As part of the new measures to strengthen the nation's standing in EV production, international automakers have agreed to spend at least $500 million in India for preferential tariff treatment on specific import volumes.

Rajesh Kumar Singh, secretary of India's Department of Promotion of Industry and Internal Trade, told CNBC that the new approach was also to achieve "very stiff localization targets of 25% by the third year and 50% by the fifth year."

"It was meant for all global EV manufacturers and domestic manufacturers," he added.

Although much attention has been paid to Tesla, Singh stressed that the programs would also entice other international manufacturers. He pointed out that VinFast, the top EV manufacturer in Vietnam, has already declared its intention to participate.

"While I don't want to mention some of the other companies who are interested, we are very confident that multiple companies will be taking advantage of this policy," Singh noted.

VinFast and Tesla Eyeing EV Business in India

In the southern Indian state of Tamil Nadu, VinFast began building its integrated EV assembly plant in February. The business would put up $500 million in the first five years, with an expected yearly capacity of 150,000 cars, as stated in its announcement.

Tesla CEO Elon Musk has recently expressed optimism for India's future. However, he abruptly postponed a scheduled trip to meet with Indian Prime Minister Narendra Modi, citing his "heavy Tesla obligations" as the reason.

"The door is, obviously, very much open [to Tesla]," Singh noted.