The Indian automotive sector has witnessed relentless changes ever since its inception. From the failed attempts to ramp up production of licensed foreign products to heavy dependence on international brands, the industry has faced formidable instability over the years. Questioning the frequent policy changes introduced by the government in recent years, multinational automaker Stellantis has urged the Indian government to implement a stable, long-term policy framework with uniform and consistent execution.
This would lead to greater confidence among automakers to invest. Stellantis, which operates in India with brands such as Jeep and Citroën, believes that policy consistency would boost its confidence to invest further in manufacturing units.
Shailesh Hazela, CEO and Managing Director of Stellantis India, emphasised the need for predictability in government action, as per an ET Auto report. He further cited that varying EV incentives and tax structures introduced by different state governments lead to discrepancies and hinder the formation of a unified strategy.
Since the nation has been witnessing a relentless shift from conventional mobility to EVs, the government has been trying to keep pace with the changing needs of the industry. As a result, there has been a slew of policy changes related to production, manufacturing, and EV incentives.
Previous Reports That Showcase EV Policy Changes At A Glance
Trade agreements with the US have played a major role in the overall changes the industry has undergone. Around March, the government considered modifying its electric car manufacturing policy (SPMEPCI) to accommodate potentially lower import tariffs under a future India-US trade agreement. These changes were introduced to attract EV investments through discounted import duties.
Industry reports from AutoCar Professional revealed that the lukewarm reaction to EVs at the time had persuaded the government to consider changes in the proposed Domestic Value Addition (DVA) criteria and the minimum value for imported vehicles in the scheme. Even then, Tesla was uncertain about its plans for India.
Even before these reports, on February 25, moneycontrol.com reported that global brokerage firm HSBC had raised concerns about the government’s plan to tweak India’s EV policy. According to the report, such changes would have put local automakers at an unfair disadvantage against imported electric vehicles. At that time, the Centre was also considering lowering import duties on foreign EVs as part of a broader effort to attract Tesla to India, following Prime Minister Narendra Modi’s meeting with Elon Musk in the US.
Going by the relentless changes, especially those being considered for Tesla, it indicates a dynamic market condition that could hinder manufacturers’ intent to invest in the industry.
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