In pursuit of a cleaner and more sustainable transportation future, India has several policies and initiatives in place to promote the adoption of electric vehicles. The key aspects of India’s EV policy are as follows:
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Demand incentives
- One of the key components of FAME is demand incentives which the government provides financial assistance such as incentives and subsidies that are available to buyers of EV in the form of an upfront reduced purchase price to enable wider adoption.
- The FAME scheme is currently in its second phase, which has a total budget of Rs 10,000 crores for three years, starting April 1, 2019. The scheme has been extended for two years beyond its original end date of March 31, 2022. To learn about the conditions availing the Demand Incentives and Vehicle segment-wise Incentives, read S.O. 1300 pages 8 and 10.
- This phase aims to support 7090 eBuses, 5 lakh e-3Wheelers, 55000 e-4 Wheeler Passenger Cars, and 10 lakh e-2 Wheelers through demand incentives of FAME II.
- To know the total approximate incentives and required approximate size of the EV battery, please check FAME. Take note that purchase incentives for EVs vary depending on state policy.
- To learn more about FAME II, you may check these documents FAME II and FAME II Redesigned, and visit the FAME II website.
- Tax Benefits including lower road tax, registration fees, and exemptions from certain taxes are also offered to some state governments. You may visit this website to learn more about tax benefits per state.
- Electric vehicle (EV) purchasers can enjoy tax benefits under Section 80EEB of the Income Tax Act. This section allows for a deduction of up to Rs 1.5 lakh on the interest paid on loans taken to purchase EVs. To be eligible for this deduction, the loan must be approved between January 1, 2019, and March 31, 2023. For further information on eligibility criteria, please visit the cleartax website.
Supply-side incentives
- The government provides financial incentives such as tax breaks and land subsidies for EV suppliers and registered EV manufacturers under the FAME II Scheme. This helps to encourage companies to invest in EV manufacturing in India. For the registration of OEM, visit the FAME-NAB website or click this.
- The PLI scheme offers financial incentives of up to 40% of the incremental sales of Advanced Automotive Technologies (AAT) products, such as EVs with a minimum battery capacity of 30 kWh. Additionally, the PLI scheme provides tax benefits, including a reduction in the GST rate from 18% to 12% for AAT products. To learn more, please click on the PLI.
- The Indian government has expanded the customs duty exemption on lithium-ion cell imports to encompass capital goods and machinery essential for their production. This exemption will remain in effect until March 31, 2024. To learn more, you may read from India Today.
- All the registered OEMs have to make their EV models certified as per AIS 156 under CMVR to be eligible to claim subsidies. If you want to know the registered EV OEM, click here.
- To learn more about the manufacturing strategy for OEM and suppliers, check NEMMP Chapter 6, for eligibility criteria for electric 2W, 3W, and 4W under FAME, click here and for the bus.
Charging infrastructure
- The government is making substantial investments in expanding and developing a charging infrastructure network, which is essential for making EVs a viable option for consumers. This includes financial support and incentives to private and public entities for setting up EV charging stations.
- FAME provides financial incentives for the development of EV charging infrastructure. The Ministry has also authorized 2,877 EV Charging Stations in 68 cities across 25 States/UTs and 1576 charging stations across 9 Expressways and 16 Highways under Phase II of the FAME India Scheme. To know more read FAME.
- From NEMMP 2020, subsidies provided up to 40% of the cost of setting up public charging stations. NEMMP’s 2020 target is to have 7,000 public charging stations and 1 million private charging stations by 2025. This includes cities like Chandigarh, Delhi, Uttar Pradesh, Maharashtra, Karnataka, Tamil Nadu, and others. To know more, read the Handbook of EV charging infrastructure implementation.
- To locate public charging stations, the are two government sites that you can use BEE and E-AMRIT.
- Charging infrastructure providers are eligible for some tax benefits, including a reduction in the Goods and Services Tax (GST) rate from 18% to 5%. To learn more, click here.
Battery development
- To address range limitations and enhance EV performance, the government is making significant investments in battery technology research and development.
- A program called the Phased Manufacturing Programme (PMP) aims to promote indigenous manufacturing of electric vehicles and their components such as battery packs, lithium-ion cells, AC / DC chargers, and others. This program includes a graded duty structure to encourage local production and value addition in the country. To know more, click here.
More EV Policy
- Public Transport Electrification: Many Indian cities were exploring the electrification of public transportation, including electric buses and e-rickshaws, to reduce air pollution and promote clean urban mobility. To know more, click here.
- Research and Development: India was investing in research and development efforts to develop indigenous electric vehicle technology, including advanced battery technology and electric powertrains.
- Scrappage Policy: The Indian government had announced plans to implement a vehicle scrappage policy to encourage the replacement of old, polluting vehicles with newer, cleaner ones, including electric vehicles. To know about benefits and eligibility criteria, visit this link.
State-Level Initiatives
- Several states in India also introduced their own EV policies and incentives, which could include additional subsidies, charging infrastructure development, and preferential treatment for electric vehicles in terms of parking and access to certain areas.
- To know the state government initiative policies, you may visit the BEE website and choose the state to know the Demand Incentives, Policy period, EV Tariff, and state EV policy.
To read the different state policy documents, you may refer to the links below:
Delhi, Maharashtra, Meghalaya, Gujarat, Assam, Bihar, West Bengal, Rajasthan, Odisha, Goa, Karnataka, Punjab, Uttar Pradesh, Uttarakhand, Madhya Pradesh, Kerala, Telangana, Tamil Nadu, Andhra Pradesh, Himachal Pradesh, Haryana,
Take note that the availability of incentives and charging infrastructure can vary by state and locality. But overall, these policies embody India’s commitment to minimize its carbon footprint and promote a sustainable transportation sector, while also positioning itself as a prominent player in the international EV market.
- To know the state government initiative policies, you may visit the BEE website and choose the state to know the Demand Incentives, Policy period, EV Tariff, and state EV policy.
- To get copies of EV State Policies and Regulations and Guidelines, click here.
- For FAME II documents issued by the Ministry of Heavy Industries, click here.
- To learn more about the National Electric Mobility Mission plan including all key aspects, you may read NEMMP 2020.
For EV inquiries, you may contact mobility-niti@nic.in
