Industrial Policy and Industrial Growth

Economic Affairs

Title

45:30

8 of 24 completed

5 of 15 completed

38 of 100 completed

8 of 20 completed

Indian Economy - Understanding the basics of Indian economic system

Regarding the New Electric Vehicle Policy, consider the following statements

The policy slashes the customs duty rate to 35% for EVs valued at USD 35,000 or more for 5 years.
The policy caps the number of imported EVs at 10,000 per year.
To promote local manufacturing, companies must set up operational facilities within 5 years.

How many of the above statements is/are correct?

Only One

Only Two

All Three

None

All statements are incorrect.

Centre’s New Electric Vehicle Policy

Highlights of the Policy

Duty Reduction for EV Imports:

The policy slashes customs duty rate to 15% (applicable to Completely Knocked Down - CKD units) will be imposed on EVs with a minimum CIF (Cost, Insurance, and Freight) value of USD 35,000 or above for a total period of 5 years.

Import Cap and Investment Prerequisites:

While allowing reduced-duty imports, the policy caps the number of imported EVs at 8,000 per year.
Manufacturers must invest a minimum of Rs 4,150 crore (∼USD 500 Mn) to avail duty concessions.
There's no ceiling on the maximum investment, incentivising substantial capital infusion into the sector.

Manufacturing and Value Addition Requirements:

To promote local manufacturing, companies must set up operational facilities within 3 years and achieve a minimum domestic value addition (DVA) of 25% within the same period, escalating to 50% within 5 years from the date of issuance of approval letter by the Ministry of Heavy Industries.
DVA is a percentage share of value that represents the value an economy adds to goods and services produced for export.

Hence option 4th is correct.

By: Shubham Tiwari