The urgency to adopt green technologies has been heightened by the recent climate disasters, with the push towards Electric Vehicle (EV) manufacturing emerging as a pivotal global effort. Given its vast population, India stands as a fertile ground for the manufacturing, export, and import of EVs. The country is making strides both domestically and on the international trade front to seize this opportunity.
The Indian government’s endorsement of the E-Vehicle Policy aims to position India as a manufacturing powerhouse for EVs. This policy outlines a three-year timeline for establishing manufacturing facilities within the country and initiating the commercial production of EVs, with a goal to achieve 50% domestic value addition within five years. Various support mechanisms, such as the Product Linked Incentive (PLI) Scheme and FAME Scheme, are in place to bolster domestic manufacturing. Leading corporations like TATA Motors, Mahindra, and Hyundai have already ventured into this sector, positioning themselves for growth in the coming years.
Critical minerals like lithium, cobalt, and rare earth elements, essential for EV battery production, are not mined in India. However, recent trade agreements with countries, including a significant Free Trade Agreement (FTA) with Australia, aim to secure these vital resources for EV manufacturing.
For those considering manufacturing in India or investing in this emerging sector, a strategic approach is indispensable. Before diving into this arena, it’s crucial to have a clear strategy addressing several factors. These include deciding on the EV segment for manufacturing, sourcing raw materials in compliance with Product Specific Rules (PSRs) and tariffs, and leveraging domestic policies like the PLI for maximum benefit.
The effectiveness of recent FTAs in supporting your business is a nuanced matter. A well-informed selection of trading partners for sourcing raw materials and exporting products can significantly benefit your venture. Conversely, choosing an unsuitable trading partner could undermine your strategy, leading to costly missteps in sourcing or exporting.
Whether your aim is to manufacture in India or engage in exporting and importing EVs to and from the country, a solid strategy is vital to capitalize on the current opportunities. We are eager to guide you through this process. Should you have any questions, feel free to reach out to us at delhi@lexpraxis.org