India likely to tighten localisation rules for EV makers by 2025: Report

Furthermore, the new regulations aim to strengthen measures against false claims by EV makers seeking subsidies, an issue that has affected previous incentive programs.

India is likely to implement stricter localisation norms for electric vehicle (EV) manufacturers and public charging stations from April 2025, the Mint has said, cites the draft of the proposed regulations.

These guidelines outline a framework for domestic manufacturing and assembly processes that will be necessary to qualify for government subsidies.

Under the new phased manufacturing programme (PMP) tied to the PM e-DRIVE EV subsidy initiative, OEMs will be required to locally source and assemble a significant number of sub-components, the report said. This includes eight essential components for electric two and three-wheelers as well as 11 components for buses.

The draft indicates a shift from the Fame-II subsidy scheme, which allowed some flexibility in imports for 18 EV components.

Moneycontrol couldn't verify the report independently.

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"We definitely want to promote faster adoption of EVs with the PM e-DRIVE, but the condition is that it must be localised to the maximum extent possible," the report quoted heavy industries ministry secretary Hanif Qureshi as saying.

Qureshi stressed on the need for a balanced approach in the new PMP. "We don't want to make PMP too difficult that it cannot be followed but we also don't want to make it too easy, which will lead to an increase in imports," he added.

The final regulations are expected to be released in the coming weeks following consultations with various inter-ministerial bodies and industry stakeholders.

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In addition to tightening local sourcing rules for key components like electronic throttle systems, traction motors, and motor controllers, the new norms may also require local assembly of non-PMP components, including tyres, suspension, and braking systems.

The draft prohibits the import of components not listed in the PMP even as its seeks to strengthen measures against false claims by EV makers, an issue that plagued the earlier subsidy regimes.