Indian government may tweak EV policy again as Tesla gears up for India entry

As Tesla is gearing up to enter the Indian market this year, the government is likely to modify the terms of the EV policy that promotes the manufacturing of electric vehicles (EVs) in the country. To attract EV manufacturers like Tesla, the tweaked EV policy may mandate the carmakers to show an annual turnover of ₹2,500 crore in the second year. Besides that, the Indian government may also offer further import duty relief, in a bid to further boost the EV industry in the country. This move would further make the path smooth for companies like Tesla.

The Indian government is likely to start accepting applications after the updated EV policy is notified in mid-March this year. The approvals are likely to be given by August 2025 and imports would commence soon after, claims a report by news agency IANS.

This development comes at a time when Tesla has restarted its India operations by posting hiring advertisements for at least 13 different job roles across different cities in the country. This move was initiated by the EV maker almost immediately after Prime Minister Narendra Modi had a meeting with Tesla CEO Elon Musk during the former's visit to the US just a few days ago.

In the last few months Indian EV industry has shown the possibility of major developments. While Tesla has indicated a reignited attempt at its official India operations, Vietnamese electric vehicle manufacturer VinFast has introduced electric cars in the country during the Auto Expo 2025. While all eyes are on Tesla now, the government is expecting a good response from several automobile majors on the EV policy.

What will the tweaked Indian EV policy offer

The Indian government announced a new EV policy in March 2025. The government announced a reduction of customs duty to 15 per cent with certain conditions for the automakers who want to import their EVs to India. The policy entailed a minimum investment of ₹4,150 crore to set up electric vehicle manufacturing facilities in the country. This new EV policy paved the way for Tesla and other automakers to enter the Indian EV market.

The policy also mandates that local EV production must start within three years and reach 25 per cent DVA (domestic value addition) by three years and 50 per cent DVA within five years at the maximum. Now, the amendment to the policy reportedly will mandate the EV makers to show an annual turnover of ₹2,500 crore in the second year.

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