Center eases EV localization norms, allows motor imports for e-buses and trucks
The Center has eased localization requirements under its electric vehicle manufacturing programme, providing relief to manufacturers of electric buses and trucks facing component supply challenges. As per PTI report, the move comes under the government’s Rs 10,900 crore PM e-Drive scheme, which aims to boost domestic EV production while strengthening the supply chain for key components. In a notification issued on March 13, the Ministry of Heavy Industries allowed manufacturers to continue importing traction motors using rare-earth magnets for electric trucks and buses until August 31. This discount applies to vehicles in the N2 and N3 categories of electric trucks and M2 and M3 categories of electric buses. The decision is expected to help manufacturers continue building local production capacities as well as manage ongoing component shortages. This is the second time the government has extended the deadline for localization of traction motors. In September last year, the Center had already extended the deadline till March 2026. With the latest notification, the requirement to completely localize the manufacturing of traction motors will now come into effect from September 1, 2026. Under the Phased Manufacturing Program (PMP) linked to PM Electric Drive Revolution in Innovative Vehicles Promotion Scheme, companies are required to complete key phases of traction motor production within India. These processes include magnet fitment, rotor assembly installation, stator assembly integration, shaft and bearing fitment, enclosure installation, as well as connectors and cable integration. These requirements aim to gradually increase domestic value addition in the EV supply chain. However, sourcing rare-earth magnets remains a major challenge globally. These magnets are a key component in traction motors used in electric vehicles, and are also widely used in sectors such as electronics, aerospace, and renewable energy. India, like many other countries, currently depends heavily on imports for these materials, with China being one of the major suppliers to the global market. To reduce this dependency, the government is also working on strengthening domestic manufacturing of rare-earth components. As part of this effort, the Center has launched a scheme to promote manufacturing of sintered rare earth permanent magnets with a financial outlay of Rs 7,280 crore. The initiative aims to support local production of these critical materials and secure the supply chain for India’s growing EV and technology industries. The latest decision to temporarily relax localization norms is expected to give manufacturers additional time to stabilize production while the country gradually builds the required capacity to manufacture key EV components domestically. Input from PTI.
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These comments are part of the “Twenty-fourth Report of the Standing Committee on Communications and Information Technology” on the ministry’s demands for grants, which was presented in Parliament on March 16.The committee said that “allocation of more funds to the ministry can help in empowering citizens, promoting inclusive and sustainable growth of electronics, IT and ITES industries and promoting digital governance to ensure a secure cyber space.”According to the report, MeitY’s budget estimate for 2026-27 is Rs 21,632.96 crore, while the budget estimate for 2025-26 is Rs 26,026.25 crore. The ministry told the committee that part of the cut reflects the discontinuation of the production linked incentive (PLI) component for large-scale electronics manufacturing, the tenure of which is expiring on March 31, 2026.The Committee also noted that the difference between the Budget Estimates and the Revised Estimates in 2025-26 was attributable to lower expenditure during the first half of the financial year and delays in executing agreements under semiconductor manufacturing projects. The ministry told the panel that semiconductor manufacturing projects are “highly complex, technology-intensive” and approved companies have to meet prescribed conditions before fiscal assistance is released, resulting in delays in agreements.The report also highlights implementation challenges in several programs, including interoperability gaps in e-governance systems, cybersecurity and privacy risks, and capacity constraints in digital infrastructure projects. It asked the Ministry to address these issues and update the Committee on progress.On cyber security and digital security, the Committee sought an update on the creation of additional posts in the Indian Computer Emergency Response Team (CERT-In) and recommended strengthening of the Data Protection Board to improve safeguards for personal data and address incidents of cyber fraud and digital scams.The committee also asked the ministry to ensure that funding shortfall does not impact the functioning of the National Informatics Center (NIC), which provides the core digital infrastructure for government platforms. It also recommended expanding digital public services with stronger local-language support to improve digital inclusion.The report also discussed the implementation trajectory of the IndiaAI mission, saying variations in allocation partly reflect the dynamics of the program’s rollout after its approval in March 2024. According to the ministry, the initial phase focused on institutional setup, consultation and operational guidelines before scaling up activities in research, ecosystem development and international collaboration.Among future initiatives, the panel suggested using the increased funding under the National Knowledge Network to establish a blockchain-based national digital research repository aimed at enabling secure knowledge sharing between research institutions.The report recommends expanding digital literacy programs in rural and tribal areas and strengthening the IT ecosystem in underperforming states, including the Northeast, to support more balanced growth in India’s digital economy.
