Cart before the horse

The new EV policy is bound to be a non-starter as it falls short on both need and timing

- 

The government has rolled out a new electric vehicle (EV) policy that aims to lure global automakers into making cars in India. But it is evident that while framing the detailed guidelines, which were notified on Monday, the ministry of heavy industries has missed the two foundational pillars for any policy's success: need and timing. Therefore, the policy seems destined to become a non-starter. Ironically, this is not because it lacks structure or seriousness, but because it is a classic case of putting the cart before the horse.

Let's start with timing. Announcing the detailed guidelines now, amid ongoing trade negotiations with the US and following the India-UK free trade agreement (FTA), sends mixed signals to both industry and potential investors. The UKFTA, in particular, slashes import duties for a fixed number of premium vehicles, from over 100% to just 10%. British brands like Jaguar Land Rover, Aston Martin, and Rolls-Royce will surely exploit this window, which may bring down car prices by up to 40%.