India, March 15 -- In what could be an olive branch for foreign electric carmakers, India has approved a new electric vehicle policy that will allow lower import tax on EVs. The Centre has approved the new EV policy which is aimed to promote local manufacturing of electric vehicles. The Ministry of Commerce and Industry issued a notification today (March 15) elaborating on the guidelines and eligibility to avail the tax benefit on imported electric cars in India.

The new EV policy states that any electric vehicle manufacturer that will commit to invest at least Rs.4,150 crore in India and a deadline of three years to start locally manufacturing electric vehicles will get import tax cuts on EVs. However, the policy restricts these EV make...