India’s Department for Promotion of Industry and Internal Trade (DPIIT) is optimistic that the country’s new electric vehicle (EV) policy will serve as a magnet, drawing in more global EV car manufacturers into the burgeoning Indian market.
Mr. Rajesh Kumar Singh, Secretary-General of DPIIT, shared with CNBC that recent initiatives undertaken by the Indian government are poised to drive EV production within the country. These initiatives aim to bolster India’s position as a key player in the global EV landscape.
Among the significant steps taken, the Indian government has rolled out measures such as import tariff reductions for international EV manufacturers. These reductions are contingent upon a commitment from manufacturers to invest a minimum of USD 500 million in India. The policy sets ambitious targets, urging manufacturers to establish 25% of their manufacturing base in India within three years and escalate it to 50% within five years from the onset of investment.
Crucially, the policy extends beyond global EV giant Tesla, aiming to attract a diverse array of foreign automakers. Notably, Vietnamese EV behemoth Vinfast has already signaled its interest in the Indian market. The company has announced plans to invest in India, aligning with the country’s EV vision.
VinFast’s foray into India began in February with the commencement of construction on an integrated EV manufacturing plant in Tamil Nadu, South India. The initial investment earmarked stands at $500 million over a span of five years. Once operational, the facility is projected to have a production capacity of 150,000 vehicles annually.
The entry of VinFast into India underscores the growing appeal of the Indian market for global EV manufacturers. As India continues to roll out supportive policies and incentives, the stage is set for a transformative shift towards sustainable mobility in the country.