FAME-3 is coming; and here is what changes for EVs

livemint.com:

NEW DELHI : The government is considering implementing stricter norms to enforce the use of local components to bolster domestic manufacturing of electric vehicles (EVs) amid instances of companies violating phased manufacturing programme (PMP) norms by assembling vehicles with imported parts. The Union ministry of heavy industries is considering introducing a 50% domestic value addition (DVA) requirement and doing away with the phased manufacturing programme as part of its proposed Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles in India (FAME) III, according to two people familiar with the development. DVA is calculated based on the net selling price of a product and the landed cost of imported inputs.

Further, the heavy industries ministry plans to introduce an annual review of compliance with indigenization norms. “One thing is, there would be an annual check of the applicants. There would be DVA.

There was no DVA in FAME so far; there was PMP. In the next phase of FAME, when it comes up, we would have DVA," said a person aware of the development. Under PMP, the government offers a graded duty structure and a timeline for the graded implementation of the indigenization of components over time to discourage imports and boost demand for local products.

DVA is currently implemented under the production-linked incentive (PLI) schemes, wherein selected applicants need to apply for DVA certification, and only after they receive the certification do they become eligible for the incentive. “DVA is a more refined concept. It’s much more stringent.