Govt mulls including charging infrastructure in EV investment mandate

The government is discussing a proposal to include investments in building a charging infrastructure network so that global players can easily meet its investment eligibility criteria under a policy announced last year.

 

Under the policy, they were required to invest $500 million over three years in setting up a manufacturing plant. In return, they would receive concessional duty for importing electric vehicles (EVs) into the country.

 

The policy, announced in March last year, was widely seen as an attempt to woo Tesla to India (though others, such as VinFast and Tata through Jaguar Land Rover, as well as BMW, had also explored it). However, it failed to attract potential global carmakers, prompting the Ministry of Heavy Industries to initiate fresh discussions with stakeholders. Many argued that existing investments in EV plants should also be included, as the current framework penalised early movers while benefiting new players who had made no investment in electric mobility in the country.

 

The policy required companies to set up a plant within three years and achieve a localisation level of 50 per cent by the fifth year of operations. The number of EVs to be imported was also restricted.

 

In return, the government had agreed to reduce import duties for interested EV makers to 15 per cent, down from the 70 per cent and 100 per cent levied on vehicles with a cost, insurance, and freight (CIF) value of $35,000 and above, for a period of five years from the date of approval.

 

A senior government official said, “After discussions with stakeholders, we are considering a proposal to ease the investment criteria by including investment in charging stations in addition to setting up a manufacturing facility.”

 

The move follows the finance ministry’s recent Budget announcement of a ₹100 billion public-private partnership fund to support infrastructure projects, including charging stations. It also announced that states would receive an interest-free loan of ₹1.5 trillion to support infrastructure projects.

 

Sources say the support will help Indian players co-invest with global EV manufacturers in building a charging network, which will now count towards their $500 million investment commitment.

 

If implemented, the change could be a big boost for Tesla, which recently began recruiting for positions in India, as seen in job postings on LinkedIn. This comes just days after Tesla Chief Executive Officer Elon Musk met Prime Minister Narendra Modi in Washington, where he had gone to meet US President Donald Trump. Musk’s engagement with India has been a long one — it began around 2020 when he explored setting up Tesla showrooms and importing cars into the country, a plan that was abandoned due to high duties. After multiple statements in 2022, he announced he was shelving his India plans.

 

However, in March 2024, with the government’s decision to drastically reduce import duties on passenger cars at a certain price point — while imposing conditions on local manufacturing — Musk showed renewed interest. But hopes were dashed again last April when Musk cancelled his visit to meet the prime minister and instead travelled to China.

 

Tesla’s India gambit: Interest, setbacks, and talks

 

2020: Tesla expressed interest in entering the Indian market

 

2022: With the government maintaining high import duties on premium EVs, Tesla shelved its India plans

 

2024: Centre announced a new policy to attract global EV makers, offering lower import duties on premium cars — provided they invest $500 million in manufacturing within three years

 

>  Elon Musk planned a visit to discuss Tesla’s India entry but abruptly cancels

 

2025: Musk met Prime Minister Narendra Modi in Washington in February