It is proposed to extend FAME-II and mandate adoption of EVs across sectors as part of a comprehensive strategy to boost electric mobility for a sustainable future
The Parliamentary Standing Committee on Industry has recommended a slew of measures to boost the adoption of electric vehicles in the country, including an extension by three years of the FAME-11 (Faster Adoption and Manufacturing of Electric Vehicles) (FAME-II) scheme.
In its report on the Promotion of Electric Vehicles, the committee emphasised including private four-wheelers and quadricycles in the scheme, alongside mandating EVs in public transport, logistics, and delivery sectors.
The Ministry of Heavy Industries (MHI) has recommended expanding the scope of FAME-II and extending its tenure to promote electric mobility. To achieve a carbon-neutral transport sector, the committee suggests establishing a deadline to mandate electric vehicles for transportation throughout the country.
The committee raised concerns about the MHI's electric two-wheeler subsidy cuts in June, urging its restoration. Additionally, addressing high ownership costs as a significant hurdle, the committee suggested reducing the goods and services tax to mitigate this expense.
"The government should explore the possibility of further shrinking the GST on lithium-ion batteries," it said, adding, "There is a need to address the issue of GST for manufacturers as well to reduce the high cost."
The committee also recommended the MHI conduct a study regarding the feasibility of battery standardisation and formulate a stable battery swapping policy. The move aims to increase customer confidence and attract foreign direct investment in the sector.
The committee said that to maximise the environmental decarbonisation benefits of EVs, the establishment of solar-powered EV charging stations is essential.
Noting the challenges associated with financing the EVs, it suggested bringing it under the Priority Sector Lending (PSL) category until the 30 percent penetration target fixed for 2030 is achieved to accelerate India's commitment towards net-zero emissions.
It also highlighted how frequent alterations in EV policies generate uncertainty within the market and the EV industry and recommended a stable policy.
The report highlights that inconsistent policies may lead to doubt among people and end users regarding the government's actions. This can hinder the growth of the electric vehicle industry. A stable policy framework is necessary to ensure a conducive atmosphere for the growth of electric mobility initiatives. Such a framework would provide confidence to stakeholders.