The government is mulling a policy to promote electric vehicles (EVs) in the country, for which an inter-ministerial group is currently conducting a feasibility study.
The policy, aimed at providing guidelines on how to promote electric and alternate fuel vehicles, is likely to be finalised by this fiscal.
According to sources, a core group has been formed with representatives from different ministries, including road
transport, petroleum, heavy industries and environment, and the National Manufacturing Competitiveness Council (NMCC).
"The state of affairs of EV industry is very very poor. The industry will not survive very long, unless there is government intervention. We need government support," Society of Manufacturers of Electric Vehicles (SMEV) president Naveen Munjal said.
The industry can create a niche for itself in 3-5 years, but with government help this can be done much faster, he said.
The size of the EV industry is pegged at about 85,000 units annually.
"If government helps, the industry can grow 2-3 times in the next 2-3 years. Otherwise, it will remain almost at the same level," SMEV Director (corporate affairs) Sohinder Gill said.
The government's feasibility study has been going on under NMCC, but the final draft as well as implementation of the policy would be carried out by the Heavy Industries Ministry, sources disclosed, adding "The main task before the group is to find ways to encourage research and development of such vehicles. It is studying options to incentivise the electric vehicle industry."
Promoting formation of joint ventures, especially in electric vehicle (EV) battery manufacturing — making it easier for technology transfers — is likely to be stressed.
Another moot point is on how to set up charging points across the country.
The core group is holding discussions with all the states for promoting alternate fuel technologies.
Currently, 4 per cent excise duty is levied on production of EVs, while components bear 10 per cent excise duty — which the manufacturers are urging the government to waive.
The import of EVs attract 14 per cent, and there is a 4 per cent duty for import of parts.