India's government has launched sweeping measures to accelerate electric vehicle adoption, including significant consumer subsidies and a new scheme to attract global EV manufacturers, aiming for a greener automotive future
In a recent Rajya Sabha session, Bhupathiraju Srinivasa Varma, Minister of State for Steel and Heavy Industries, clarified that the FAME-India Scheme phase-II does not directly incentivise electric vehicle (EV) manufacturers but focuses on consumer benefits. Launched in 2019 with an initial budget of Rs 10,000 crore, later supplemented by Rs 1,500 crore, the scheme has subsidised over 15.4 million EVs by 30th March 2024. This includes about 13.6 million two-wheelers, 1.57 million three-wheelers, and 20,352 four-wheelers.
Primary beneficiaries of FAME II include Tata Motors and Ola, with 221 EV models supported. As the world's third-largest automotive market, India is pushing hard to lead the shift from internal combustion engines to electric vehicles. The government's latest move, the 'Scheme to Promote Manufacturing of Electric Passenger Cars in India,' launched on 15th March 2024, aims to attract global EV manufacturers and establish India as a significant EV manufacturing hub. Approved manufacturers can import electric cars at a reduced customs duty of 15 percent for five years, down from the current 70-100 percent.
The scheme complements existing initiatives like the FAME India scheme, Production Linked Incentive (PLI) schemes, and Advanced Chemistry Cell (ACC) manufacturing. By 2030, the government projects EVs could account for 35-40 percent of two-wheelers, 9-11 percent of private four-wheelers, and 20-25 percent of shared four-wheelers in India. This comprehensive strategy is designed to reduce air pollution, improve trade balance, decrease reliance on crude oil, and spur innovation and job creation, aligning with India's vision for a cleaner, self-reliant future.