Localisation Content

Imagine a bakery claiming its bread is entirely homemade, while in reality it only mixes and bakes dough that was actually prepared and shipped in from a factory overseas, doing perhaps the final, least valuable ten percent of the work itself. Localisation Content is the specific metric that prevents an EV maker from making an equivalent claim, measuring how much of a vehicle's actual value is genuinely sourced or manufactured domestically, not just assembled there.

Localisation Content is calculated as the percentage of a vehicle's total cost or value that comes from domestically manufactured components and materials, as opposed to imported ones simply bolted together in an Indian factory. This distinction matters enormously to policy design, a vehicle assembled in India from entirely imported parts creates comparatively few domestic manufacturing jobs and does almost nothing to build India's own component supply chain, even if the final vehicle carries an Indian-made label.

This is exactly why FAME subsidies and PLI Auto incentives have been progressively tied to rising minimum localisation thresholds, a manufacturer only qualifies for the full incentive if a genuine, escalating share of the vehicle's value is actually domestically sourced, deliberately pushing companies to build real component supply chains in India rather than simply importing kits for final assembly.

For electric two-wheelers specifically, this has proven a genuine tension point precisely because of the battery cell dependency already covered on this site, a vehicle can achieve strong localisation on its frame, motor and most components, while the single most valuable component, the battery cell, remains overwhelmingly imported, making the localisation threshold considerably harder to clear than it would first appear.

Whenever an EV maker is found to have overstated its localisation content to claim incentives it did not fully qualify for, a genuine and recurring point of regulatory scrutiny in India's EV industry, the core issue is almost always this same gap, imported battery cells and other high-value components counted, deliberately or carelessly, as domestic content they simply were not.