The Scheme to Promote Manufacturing of Electric Passenger Cars (SMEC) in India, notified on March 15, 2024, aims to attract global investments, promote India as a manufacturing hub for electric vehicles (e-4Ws), and boost domestic value addition (DVA). Approved applicants are required to invest a minimum of ₹4,150 crore (USD 500 million) within three years, achieving 25% DVA during this period and 50% within five years.
The scheme allows limited imports of e-4Ws at reduced customs duty,capped at 8,000 vehicles per year, with a total duty foregone per applicant limited to ₹6,484 crore or the committed investment. IFCI has been appointed as the Project Management Agency (PMA), and two stakeholder consultations have been held. Detailed guidelines are under development and will be notified in 2025.
The scheme emphasizes strict DVA compliance, advanced performance criteria for e-4Ws, and coordination through an inter-ministerial sanctioning committee, with testing by accredited agencies like ARAI,ICAT, and GARC. The initiative aligns with “Make in India,” encouraging indigenous manufacturing and employment generation while integrating with the PLI-Auto scheme.
The PM e-Bus Sewa – Payment Security Mechanism (PSM) Scheme, notified on October 28, 2024, with a total financial outlay of ₹3,435.33 crore,aims to ensure payment security for OEMs/operators in case of default by Public Transport Authorities (PTAs) for e-bus procurement and operations under Gross Cost Contract (GCC) or similar models.
Covering 38,000 or more e-buses for up to 12 years, the scheme includes mechanisms such as Escrow Accounts and Direct Debit Mandates (DDM) with RBI to recoup funds in case of non-payment. PTAs are required to repay disbursed funds within 90 days, with penalties including Late Payment Surcharge (LPS) and MCLR-based interest rates.MHI has designated CESL as the implementing agency and formed a Steering Committee for monitoring.
As of now, scheme notifications, guidelines, and communications with stakeholders, including PTAs and State Governments, have been issued,and a consultation meeting was held on November 21, 2024, to finalize SOPs for implementation. The scheme supports sustainable urban mobility by fostering private investment and promoting risk management in e-bus adoption.
