India plans to offer fresh incentives to companies making electric vehicles (EVs) as part of a broad auto sector scheme it expects to attract $14 billion of investment over five years, according to industry sources and a document seen by Reuters.

The country's efforts to promote EVs to reduce its oil dependence and cut pollution have been stymied so far by a lack of investment and weak demand, as well as the patchwork nature of existing incentives that vary from state to state.

The new automotive sector scheme, however, has been under discussion since mid-2020 to provide a more focused approach, industry sources close to the matter told Reuters. The plans envisage $8 billion of incentives for carmakers and suppliers over a five-year period to drive large investment in the sector.

Final details of the scheme are expected within a month, but companies will be able to apply for incentives from April 1, the sources said.

Companies will receive 4-7% government cashbacks on the eligible sale and export value of vehicles and components, but for EVs and their components there is an additional 2% as a "growth incentive" to promote electric mobility, according to the draft policy document seen by Reuters.

Elon Musk's Tesla Inc is already gearing up to enter India while rivals including Ford, Volkswagen and India's Tata Motors and Mahindra Mahindra also have plans to invest billions of dollars in EVs to meet stricter global emissions regulations.

Read more at: https://www.vccircle.com/india-to-launch-supercharged-push-for-global-electric-vehicle-players