Falling Short: India Must Ensure Technology Transfer in the EV Segment

(Source: The Hindu, Editorial Page)

Background: 

• The SPMEPCD (Scheme for Manufacturing of Electric Passenger Cars under Customs Duty Concessions) allows global EV makers to import vehicles at a reduced 15% duty for 5 years if they set up a manufacturing unit with an investment of ₹4,150 crore. While this may boost EV adoption in the short term, it risks repeating past mistakes seen in India’s mobile phone sector, where FDI surged but failed to create meaningful domestic design or tech capacity.

Overreliance on Market Access:

• The policy incentivizes FDI through reduced tariffs but does not impose obligations on transferring critical EV tech.

• Global players may use India as a sales market without truly integrating with its innovation ecosystem.

Missed Opportunity for Tech Sovereignty:

• India has the chance to build robust domestic EV supply chains (motors, battery management systems, AI controls), but current policy lacks enforceable tech-sharing clauses.

• Without local R&D mandates, India remains dependent on foreign patents and designs.

 Learning from the Mobile Phone Sector:

• Despite large-scale manufacturing under PLI, India’s mobile phone sector is still import-dependent for core components like chipsets and display tech.

• The EV sector could suffer a similar fate if industrial policies continue to prioritize assembly over innovation.

Need for Innovation-Led Policy:

• Nations like China used early EV concessions strategically—requiring joint ventures and knowledge sharing.

• India must emulate such models to ensure Make in India also means Design and Innovate in India.

Way Forward:

• Insert mandatory clauses for technology transfer and local IP development in EV investment contracts.

• Incentivize domestic R&D parks and auto-tech incubators with tax breaks and funding support.

• Promote public–private research alliances to ensure India owns the EV future, not just assembles it.