India may want more EV parts to be made locally. It may not be entirely feasible

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₹778 crore, solely for electric two- and three-wheelers, with an initial run-time of four months, which was later extended till September. For OEMs, this impending tightening could trigger a significant shift in their operational strategies. The PMP is crucial because only manufacturers that comply with its criteria are eligible for government incentives under schemes like FAME and the EMPS.

Past government notifications have already laid the groundwork for reducing reliance on imports. A 2021 notification initiated a phased strategy to curb imports of 18 critical EV components by gradually increasing import duties. This allowed manufacturers to import parts such as HVAC systems, circuit breakers, body panels, traction battery packs, and traction motors until specified deadlines to qualify for FAME-II incentives.

All other components necessary for EV manufacturing were mandated to be produced, sourced, and tested domestically, as per the notification. Notably, the government included an exception allowing the import of components for traction battery packs—the primary energy storage units in EVs—for local assembly of the final product. The anticipated tightening of directives comes at a time when Indian OEMs are under pressure to compete with Chinese manufacturers, who benefit from extensive capital support and have established themselves as global suppliers.