Government unveils EV manufacturing incentives for 2026

The Ministry of Industries has released the framework for its 2026 EV manufacturing policy, aimed at pulling assembly — and eventually battery production — onshore.

The key incentives

Assemblers that hit battery and drivetrain localization targets qualify for reduced duty on remaining imported components, on a sliding scale that increases as local content rises. There is also a five-year tax holiday for new battery-pack assembly plants.

Who benefits first

Brands already assembling locally, like MG and BYD's local partners, are best placed to move quickly. Expect announcements on expanded local assembly lines within the next two quarters.

What it means for buyers

Locally assembled EVs should see prices ease as the localization discounts phase in, widening the price gap with fully imported models. If you are not in a hurry, this is a policy worth watching before committing to an import.