Rama Krishna Sangem
The Modi government is unrelenting on boosting local manufacturing. The Ministry of Heavy Industries is discussing a phased manufacturing programme (PMP) with stakeholders, requiring stricter localisation for electric vehicle (EV) makers to qualify for the proposed Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME-III) subsidy scheme.
In its recent discussions with stakeholders, the ministry suggested reducing the number of components under PMP in FAME-III from 18 to 12. Components such as power and control wiring harnesses, connectors, miniature circuit breakers, electric safety devices, lighting, and body panels, which have been eliminated from the list, will now have to be domestically manufactured.
Moreover, the ministry reiterated that all other parts, components, and sub-assemblies of EVs must be domestically manufactured and assembled. It has asked automobile (auto) companies to provide feedback on the proposed changes.
Limited imports
For components under PMP, a clear path for localisation is being discussed. For instance, in electric two-wheelers, three-wheelers, and electric rickshaws, only the cell and associated thermal and battery management systems can be imported.
Battery modules or complete battery packs in completely knocked down form will not be permitted. All other parts required to assemble the battery pack must be domestically procured or manufactured.
For onboard chargers, only the semiconductor device and electronics can be imported. All other components, including the assembly of the finished product (such as printed circuit board (PCB) manufacturing and soldering of electronics), must be done domestically.
In the case of vehicle control units and direct current (DC)-to-DC converters, only semiconductor devices and electronic components can be imported. All other parts, including PCB manufacturing, must be sourced domestically.
For the traction motor — another key EV component — only permanent magnets, Hall Effect sensor kits, and the encoder can be imported, while all other components must be domestically procured.
Finished parts imports not Ok
The ministry has also made it clear that local suppliers importing finished parts (traders who then sell to auto companies) and direct imports from foreign sources will not qualify for PMP and FAME-III.
The ministry has defined activities that qualify as indigenous sources eligible for PMP and FAME-III. These include local sourcing of raw materials and child parts, local assembly of finished products, and partial import combined with partial local sourcing of raw materials and child parts, followed by local assembly of finished products.
