NEW DELHI: The Union government on Friday approved an electric-vehicle policy, under which import duty concessions will be given to companies setting up manufacturing units in the country with a minimum investment of USD 500 million, a move aimed at attracting major global players like US-based Tesla.

The concession was announced days after Commerce and Industry Minister Piyush Goyal said the laws and tariffs on EVs would be formulated to attract companies from around the world and not just tailor-made for Tesla.

The companies setting up EV passenger car plants will be allowed to import up to 8,000 cars at lower customs/import duty of 15 per cent on vehicles costing USD 35,000 and above for a period of five years. At present, the customs duty ranges from 70-100 per cent for vehicles costing above USD 40,000.

The carryover of unutilised annual import limits would be permitted.

The approved applicants should invest at least Rs 4,150 crore (USD 500 million) for the manufacturing of e-4W (electric four-wheelers), and the plant should be operational within three years.

“We felt that if we give tariff benefits, at least, we should have reasonably stringent performance requirements on investment, and also fairly stringent domestic value addition requirements to ensure that the local ecosystem and local manufacturing develops,” Department for Promotion of Industry and Internal Trade (DPIIT) Secretary Rajesh Kumar Singh told the media.

When asked besides Tesla, which other firms have shown interest, he said, “There are multiple expressions of interest”.

As per the scheme notification, the expenditure incurred on land will not be considered for meeting the threshold criteria of cumulative minimum domestic investment, and the companies should have a minimum of Rs 10,000 crore global group revenue.