India's EV Policy: Bank Guarantees Hinder Foreign Automakers

India wants more electric cars!

The government offered a deal: if foreign car companies build EVs in India, they get to import some cars at a lower tax rate.

But, the companies need to promise they'll invest a lot of money and make parts in India.

To make sure they keep their promises, the government wants a large bank guarantee, a type of financial promise.

This guarantee is too expensive for some companies.

Because of this requirement, no foreign carmakers have signed up for the deal yet, despite other incentives being offered.

The government uses similar guarantees for other EV projects, like electric buses, which have been more successful.