Centre eases EV localisation norms, allows motor imports for e-buses and trucks

The Centre has eased localisation requirements under its electric vehicle manufacturing programme, offering relief to makers of electric buses and trucks facing component supply challenges. 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, reported PTI.

In notifications issued on March 13, the Ministry of Heavy Industries allowed manufacturers to continue importing traction motors that use rare-earth magnets for electric trucks and buses until August 31. The relaxation applies to vehicles in the N2 and N3 categories of electric trucks and the M2 and M3 categories of electric buses. The decision is expected to help manufacturers manage ongoing component shortages while they continue building local production capabilities.

This is the second time the government has extended the timeline for localisation of traction motors. Last year in September, the Centre had already pushed the deadline to March 2026. With the latest notification, the requirement to fully localise the manufacturing of traction motors will now come into effect from September 1, 2026.

Under the Phased Manufacturing Programme (PMP) linked to the PM Electric Drive Revolution in Innovative Vehicle Enhancement scheme, companies are required to carry out key stages 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. The goal of these requirements is to gradually increase domestic value addition in the EV supply chain.

However, sourcing rare-earth magnets has remained a major challenge globally. These magnets are a crucial component in traction motors used in electric vehicles, and they are also widely used in sectors such as electronics, aerospace and renewable energy. India, like many other countries, currently relies heavily on imports for these materials, with China being one of the dominant suppliers in the global market.

To reduce this dependence, the government is also working on strengthening domestic manufacturing of rare-earth components. As part of this effort, the Centre has introduced the Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnet with a financial outlay of Rs 7,280 crore. The initiative aims to support the local production of these critical materials and secure supply chains for India’s growing EV and technology industries.

The latest decision to temporarily relax localisation norms is expected to give manufacturers additional time to stabilise production while the country gradually builds the capacity needed to manufacture key EV components domestically. Inputs from PTI.