India’s New EV Policy 2025: Full Breakdown for Buyers and Carmakers
India is accelerating its electric vehicle (EV) revolution. The government has officially rolled out a new scheme called SPMPCI – Scheme to Promote Manufacturing of Electric Passenger Cars in India. If you’re planning to buy a premium EV like the Mercedes EQS 450 SUV, BMW i7, or even waiting for Tesla’s India entry, this new policy directly impacts your choices and pricing.
Let me explain everything in simple Indian terms, especially how it affects you as a buyer and what global carmakers must do to enter or grow in India.
Key Highlights of the India EV Policy 2025
Big Import Duty Cut – But With Conditions
Earlier, EVs imported into India attracted a 110% import duty, making premium EVs extremely expensive.
Under the new policy:
- Import duty is slashed to 15%, but only if the carmaker invests $500 million (~₹4,150 crore) in India within 3 years.
- They can use existing factories, but past investments won’t count toward the ₹4,150 crore minimum.
- After fulfilling the investment condition, companies can import EVs at lower duty for 5 years.
Buyer Point: Expect global EV brands like Mercedes-Benz (Mercedes India Official Site), BMW, Hyundai (Hyundai India), and even Volkswagen to launch more models at lower prices once their investments are locked in.
Turnover & Local Manufacturing Goals
To ensure long-term commitment, carmakers must also meet revenue and localisation goals:
| Year | Turnover Requirement | Local Manufacturing Target |
|---|---|---|
| 2nd Year | ₹2,500 crore | — |
| 3rd Year | — | 25% local value addition |
| 4th Year | ₹5,000 crore | — |
| 5th Year | ₹7,500 crore | 50% local value addition |
So, it’s not just about importing – brands need to start making EVs in India, step-by-step.
Buyer Point: Over time, expect EVs to become more affordable and service-friendly as localisation increases. Maintenance will become easier too.
Only Premium EVs Get Tax Cut
To protect Indian EV makers like Tata, Mahindra, and MG, the government has smartly set a price cut-off:
- The 15% import duty applies only on EVs priced above $35,000 (~₹30 lakh).
- Mass-market EVs like Tata Nexon EV, Punch EV, Curvv EV, Mahindra BE.05, or MG Windsor won’t face unfair competition from foreign imports.
Buyer Point: If you’re shopping for an EV under ₹30 lakh, this policy doesn’t affect your options directly. Indian brands will stay competitive.
Import Cap: Maximum 8,000 Units per Year
To stop misuse of the tax break:
- Only 8,000 premium EVs per year can be imported under the 15% duty rule.
- Anything more will attract the usual 110% duty.
- Unused quotas can be rolled over to the next year.
- Government savings under this scheme are capped at ₹6,484 crore or the actual investment made, whichever is lower.
Buyer Point: If you’re planning to buy a luxury EV from abroad, availability might be limited, and pricing could vary after this quota is exhausted.
What Counts as Investment?
Carmakers can include several expenses as part of their ₹4,150 crore investment:
- R&D Centres
- Manufacturing machines
- EV factory buildings (up to 10% of the investment)
- Charging infra (up to 5% allowed)
Buyer Point: The more the companies invest in local production and infra, the faster EV charging stations and service centres will grow across India.
Eligibility for Automakers
To join the scheme, a carmaker must:
- Have annual revenue of ₹10,000 crore from auto manufacturing.
- Have global assets of at least ₹3,000 crore.
This ensures only serious and capable brands enter the Indian EV game.
Who’s In, Who’s Out?
Interested:
- Mercedes-Benz
- BMW
- Hyundai
- Volkswagen
- Skoda
These brands have shown interest in investing in India and benefitting from this EV policy.
Not Ready Yet:
- Tesla
- Despite the benefit, Tesla is hesitant due to current U.S. political policies under Trump’s influence.
- Tesla may continue to sell at high prices with 110% duty, unless they commit to Indian manufacturing.
Buyer Point: Don’t wait for Tesla’s lower prices. If you’re looking for a luxury EV, consider brands that are ready to manufacture in India.
Final Verdict for Buyers
India’s EV policy 2025 is a major step forward, especially if you’re considering premium EVs like:
- Mercedes EQS 450 SUV
- BMW i7 M70 xDrive
- Hyundai Ioniq 5
- Kia EV6
For budget-conscious buyers looking at Tata, Mahindra, or MG EVs, this policy indirectly helps too, by ensuring fair competition.
Big win for India – more investment, more jobs, better EV tech, and faster infrastructure growth.
Big win for buyers – lower prices on luxury EVs, more choices, better service, and faster charging networks.
FAQs on India’s EV Policy 2025
Q1. Will EV prices drop after this policy?
➡️ Yes, especially for luxury EVs priced above ₹30 lakh. Expect better pricing from Mercedes, BMW, Hyundai, and more.
Q2. Does this affect Tata, Mahindra, and MG electric cars?
➡️ No direct impact. The government has ensured protection for EVs priced below ₹30 lakh.
Q3. Can Tesla become cheaper in India now?
➡️ Only if Tesla manufactures locally. Right now, they may continue importing at 110% tax.
Q4. Will more EVs launch in India because of this?
➡️ Definitely. Brands are already planning launches as they look to invest and enter under the new policy.
Q5. How will this help EV charging infra?
➡️ The policy allows charging infra investment to count under total investment, so more brands will likely install charging stations.
