The Indian government has been working to launch the third iteration of its FAME (Faster Adoption & Manufacturing of Electric Vehicles) subsidies in the upcoming budget, Pune.News reports, citing an insider from the Ministry of Heavy Industries (MHI).
Deliberation progress
According to the report, the MHI has already submitted a comprehensive proposal for the FAME-III scheme to the Prime Minister’s Office (PMO) for further evaluation.
For context, FAME is a dedicated government program to promote the shift to clean electric vehicles (EVs).
The auto industry reportedly seeks Rs 10,000 crores allocation in the upcoming Budget announcement to support the sales of electric two-, three-, and four-wheeler electric vehicles.
The proposal is expected to be unveiled in July 2024, with a senior official confirming that they could be included in the full budget. Another official reportedly disclosed that the government will make the final decision closer to the budget announcement, considering the fiscal situation.
The new proposal will include key measures to verify the production capacity of automakers seeking subsidies to address issues of abuse from the prior FAME scheme iterations.
Electric Mobility Promotion Scheme (EMPS)
In hindsight, the Indian automotive industry has been calling for the government to extend the FAME scheme during the interim budget of 2024-2025.
However, government officials have chosen to introduce the new Electric Mobility Promotion Scheme 2024, marking a significant strategy shift.
The RS 500 crore EMPS 2024 only subsidizes two and three-wheeler EVs, with incentives of up to Rs 10,000 per electric two-wheeler and up to Rs 50,000 per electric three-wheeler. These subsidies dropped to less than 50% of what the FAME II provided. In addition, it excluded electric four-wheelers from the eligible list of EVs for the subsidies. It only seeks to support the sales of 333,387 two-wheeler and 38,828 three-wheeler EVs.
It is also exclusive for automakers that already have local production capacities, marking a significant shift from FAME I.
Therefore, industry voices like Amitabh Kant continue to demand FAME scheme continuation until the end of the decade to hit the country’s ambitious EV30@30 vision.
“If we want to achieve the EV30@30 vision, we have to ensure FAME-III policy consistency.”
Amitabh Kant, G20 Sherpa for India
EV adoption in India
The electric vehicle industry in India has enjoyed notable growth over the past few years, primarily due to government incentives.
As noted in the report, EV registrations have exceeded the 15 Lakh threshold in 2023 alone. So far this year, the country has already registered nearly 8 Lakh EVs.
This significant registration growth signifies the Indian customers’ increasing interest in clean mobility alternatives.
The continuation of the FAME scheme is indeed crucial for India to boost the number of electric vehicles on its roads. It would substantially aid the government’s efforts to promote green mobility under its wider strategy of cutting carbon fuel reliance.
