India gets zero applications for electric car manufacturing scheme, MHI to Parliament

The government has not received any applications for the Scheme for Promotion of Manufacturing Electric Cars in India, the Ministry of Heavy Industries informed Parliament.Original equipment manufacturers (OEMs) have told the government that their decision to participate depends on the progress of India-EU free trade agreement negotiations.
OEMs also indicated that restrictions on rare earth magnets could affect meeting the scheme’s domestic value addition (DVA) targets. They further noted that threshold investment requirements and associated timelines may be difficult to meet.
A stakeholder consultation was recently held with electric car makers to discuss the way forward. However, the ministry has clarified that there is no proposal at present to reopen the application window.
According to sources, the government may consider accepting applications in the future if OEMs show interest. The application window closed in October 2025, and so far no automaker has applied. The scheme, designed to boost domestic electric car production, will remain in effect for five years.Auto PLI scheme explained

The electric car manufacturing scheme sits within the broader Production Linked Incentive (PLI) architecture for the auto sector, approved in 2021. The government had cleared a ₹26,058 crore PLI package for automobiles, auto components, and drones, with ₹25,929 crore earmarked specifically for the auto industry.

This overarching Auto PLI scheme seeks to position India as a hub for next-generation mobility technologies by offering incentives of up to 18% to manufacturers of battery electric vehicles (EVs) and hydrogen fuel cell vehicles, as well as advanced automotive components. It is structured in two parts:

• Champion OEM Incentive Scheme – Targets manufacturers of Battery EVs and Hydrogen Fuel Cell Vehicles.
• Component Champion Incentive Scheme – Covers advanced automotive technology (AAT) products, including EV-specific components such as high-voltage connectors, charging ports, sensors, electronic power steering, automatic transmission systems, and advanced safety technologies.

Eligibility norms are stringent: Large OEMs need global revenue of at least ₹10,000 crore, with mandatory investment commitments of ₹2,000 crore for four-wheelers or ₹1,000 crore for two-wheelers over five years.

Auto-component makers must have ₹500 crore revenue and commit ₹150 crore in investments. Non-automotive investors with ₹1,000 crore global net worth also qualify.