The Ministry of Heavy Industries (MHI) has mandated domestic manufacturing of key electronic components in electric trucks — including battery management systems (BMS), DC-DC converters and vehicle control units (VCUs) — from September 1, 2026, making localisation a condition for accessing subsidies under its e-truck incentive programme.

The move, notified by MHI on April 29, amends the phased manufacturing programme (PMP) for N2 and N3 category electric trucks. It tightens localisation norms and effectively phases out imports of critical control systems. India has earmarked ₹500 crore for electric trucks under the broader ₹10,900-crore PM E-Drive scheme.

From assembly to electronics manufacturing

The notification marks a shift from basic assembly to component-level manufacturing. As per the MHI notification, “manufacturing of BMS… shall at least include assembly of electronic components/semiconductors/connectors on the PCB… and shall be domestically performed.”

Similar requirements apply to DC-DC converters and vehicle control units, covering wiring, connector fitment, enclosure integration and software or firmware flashing.

For DC-DC converters, the norms move from integration of imported PCB assemblies to full domestic assembly, with the notification stating that “assembly of electronic components… on the PCB… shall be domestically performed” from September 2026.

Import window closes

The regulation also sets a clear transition deadline. As per the notification, “up to 31st August 2026, import of BMS may be permitted,” after which vehicles using imported systems will no longer qualify for incentives.

Subsidy structure and eligibility

The incentive framework covers electric trucks with a gross vehicle weight between 3.5 tonnes and 55 tonnes. Subsidies are calculated at ₹5,000 per kilowatt-hour of battery capacity, capped at 10 per cent of the vehicle’s ex-factory price. Electric trucks in the N2 category are eligible for incentives of up to ₹2.7 lakh, while trucks in the 7.5–12 tonne range can receive up to ₹3.6 lakh. Buyers are required to scrap older vehicles to claim the subsidy.

OEMs face supply chain reset, but industry backs localisation push

For electric truck manufacturers, the September 2026 deadline creates a compressed timeline to restructure sourcing strategies, particularly for companies dependent on imported BMS and control systems.

“This transition will require investments and could increase costs in the near term, especially as OEMs rework supply chains and localise critical electronics,” said Uday Narang, Founder & CEO, Omega Seiki Mobility. “But this is a necessary step if we want to build scale in India’s zero-emission journey.”

The shift goes beyond hardware, extending to software and firmware integration, and pushing OEMs to take greater control over vehicle electronics architecture.

Narang added that the policy could accelerate the development of a domestic ecosystem. “This kind of localisation will drive capability building across the value chain — from component manufacturing to electronics and software. It is an investment the industry needs to make collectively.”

The move is expected to benefit domestic component makers and electronic manufacturing services (EMS) providers, as suppliers transition from integrating imported PCB assemblies to full component-level manufacturing, including semiconductor placement and assembly.

Global suppliers exporting fully built systems may need to set up local manufacturing or enter joint ventures to remain part of the supply chain. While industry participants expect short-term cost pressures as domestic capacity scales up, Narang said the shift is essential for long-term competitiveness. “If India has to build a strong EV ecosystem, especially in commercial vehicles, this level of localisation is inevitable. It may be challenging in the short term, but it lays the foundation for scale and self-reliance.”

Published on April 30, 2026