Topic: Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth.
Q5. How does India’s new EV manufacturing scheme attempt to balance foreign investment with domestic industrialisation? Analyse the key localisation challenges in India’s EV ecosystem. Suggest a comprehensive strategy to strengthen India’s self-reliance in electric mobility. (15 M)
Difficulty Level: Medium
Reference: TH
Why the question
More than a year since it was announced, the Ministry of Heavy Industries Monday notified guidelines of the Scheme to Promote Manufacturing of Electric Passenger Cars in India. The scheme reduces existing duties on import of vehicles for overseas manufacturers from the present 70-100% to 15% subject to the maker meeting minimum requirements for investment and setting up facilities in the country.Key Demand of the question
The answer must examine how the policy balances foreign entry and domestic growth, critically analyse the localisation bottlenecks, and propose a strategy to achieve long-term EV self-reliance.Structure of the Answer:
Introduction
Mention India’s dual objective of green mobility and industrial self-reliance amid rising EV demand.Body
- Show how the scheme incentivises foreign EV makers while mandating domestic investment and value addition.
- Discuss localisation issues such as R&D gaps, supply chain weaknesses, and policy asymmetries.
- Suggest measures including mandatory tech transfer, battery ecosystem development, skilling, and MSME support.
Conclusion
Highlight that strategic policy convergence and ecosystem strengthening are essential for India’s EV leadership.
