Sector brief 07 of 08
Automotive & EV
Vehicles, components, EVs and battery cells take 100% FDI on the automatic route. Output and exports set records in FY2025-26, incentives pay for local value addition, and the UK and EU trade agreements change the import-first entry route.
In this brief
Everything in this sector brief
11 pages, from the market case to the set-up roadmap and every incentive with its status.
Automotive and electric vehicles
Vehicles, components, EVs and battery cells take 100% FDI on the automatic route. Output and exports set records in FY2025-26, incentives pay for local value addition, and the UK and EU trade agreements change the import-first entry route.
ReadRecent foreign investments in automotive
Japanese, Korean and Vietnamese carmakers are adding Indian capacity. Announcements and plants since 2024, as reported by the companies or the press; amounts are as stated by the source.
ReadFDI rules for automotive and EV
Vehicles, components and EVs are open to 100% foreign ownership on the automatic route. No prior approval is needed unless a beneficial owner is from a country that shares a land border with India, such as China.
ReadRegulators and registrations: automotive and EV
Vehicle makers need certification, value-addition and EPR registrations. The table lists each approval, the authority and portal, when it is needed and the typical time where a rule fixes one.
ReadCentral incentives for automotive and EV
PLI pays up to 18% on advanced-technology sales with 50% local value. Older EV subsidies have closed; jobs, R&D and export support continue. Status as of 1 October 2026; the notified scheme guidelines govern eligibility and payment.
ReadState incentives for automotive and EV
States add SGST refunds and capital subsidies of up to 30% for EV projects. Five state packages compared, with policy names, validity and headline incentives as of 1 October 2026.
ReadTax, customs and trade for automotive and EV
GST fell to 18% on small cars and parts; EVs pay 5%. Imported cars face high customs duty, which the UK and EU agreements cut within quotas. Budget 2026-27 widened exemptions for cell plants and critical minerals.
ReadSet-up roadmap for vehicle and component makers
From imported cars to local manufacturing in eight steps. Written for a vehicle maker moving from imports to assembly to full manufacturing; component and battery makers skip the import step and apply for the state package before investing.
ReadWhat to watch: automotive and EV
Value-addition tests, ownership checks and scheme dates drive the risk. Each watch-out below is drawn from the brochure's compliance list and the pitfalls stated elsewhere in it, as of 1 October 2026.
ReadRecent changes: automotive and EV
What changed since 2025, by date: the GST cut on vehicles, the India–EU FTA, Budget 2026-27 customs changes, the land-border easing, the India–UK CETA and the close of magnet scheme bidding.
ReadSources: automotive and EV
Every reference cited in the automotive and EV sector brief, grouped as in the brochure. Entries marked secondary are press or adviser summaries rather than primary documents.
ReadUpdates
Recent changes
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