India is rapidly embracing a sustainable future, with electric vehicles (EVs) at the forefront of this transformation. The Indian government has launched various initiatives, incentives, and policies to promote EV adoption, focusing on reducing carbon emissions, combating pollution, and decreasing dependence on fossil fuels. These efforts, undertaken at both central and state levels, aim to make EVs more affordable and accessible to the masses. By incentivizing manufacturers and encouraging consumers, the government is driving the growth of the EV market, paving the way for a cleaner, greener, and more sustainable transportation sector in India.
To promote electric vehicle (EV) adoption, the Indian government, both at the central and state levels has implemented various schemes which are as listed below:
1. FAME India Scheme (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles)
The FAME India scheme, launched in 2015, has been instrumental in driving EV adoption. Phase II, which began in 2019 and runs until 2024, has been expanded to include electric two-wheelers, three-wheelers, and four-wheelers. The scheme offers direct subsidies, ranging from ₹15,000 to ₹20,000 for electric two-wheelers and up to ₹1.5 lakh for electric four-wheelers. Moreover, substantial funds are allocated for building charging infrastructure, particularly in remote and rural areas, to address range anxiety.
2. State-Level Incentives and Subsidies
Several states have introduced their own initiatives in addition to the central government’s FAME scheme, further promoting EV adoption.
- Delhi: Delhi’s EV Policy offers significant subsidies, such as ₹30,000 for two-wheelers, ₹1.5 lakh for electric cars, and ₹10 lakh for electric buses. Delhi aims to have 25% of its vehicles be electric by 2024, positioning itself as a hub for electric mobility.
- Maharashtra: Maharashtra provides subsidies up to ₹1.5 lakh for electric cars and ₹25,000 for electric two-wheelers. In addition, tax exemptions, road tax waivers, and reduced registration fees are offered to further encourage adoption. The state also focuses on expanding charging infrastructure.
- Uttar Pradesh: Uttar Pradesh targets electric two-wheelers and three-wheelers, offering subsidies of ₹10,000-₹20,000 for two-wheelers and ₹50,000 for electric auto-rickshaws. The state also promotes local EV production.
- Tamil Nadu: Tamil Nadu incentivizes both manufacturers and consumers, providing subsidies of ₹15,000 for electric two-wheelers and up to ₹1 lakh for electric cars. The state aims to become a hub for EV manufacturing.
3. Income Tax Benefits and GST Reductions
To make electric vehicles (EVs) more affordable, the government has introduced several financial incentives. Under Section 80EEB of the Income Tax Act, buyers can claim a deduction of up to ₹1.5 lakh on the interest paid for loans taken to purchase EVs.
Additionally, the government has reduced the Goods and Services Tax (GST) on electric vehicles from 12% to 5%, making EVs more cost-effective for consumers. It has also lowered the GST on charging infrastructure to 18%, which encourages the installation of more charging stations and supports the growth of the EV ecosystem. These measures aim to reduce the financial burden on buyers and accelerate the adoption of electric mobility in the country.
4. Incentives for EV Manufacturers and Startups
To support domestic production and innovation, the government has introduced several measures aimed at helping electric vehicle (EV) manufacturers. One key initiative is the Production Linked Incentive (PLI) scheme, launched in 2021, which incentivizes manufacturers to produce electric vehicles and their components, such as batteries, motors, and chargers, within India.
This initiative not only aims to attract both domestic and international investment but also seeks to position India as a key player in the global EV supply chain. Additionally, under FAME Phase II, manufacturers involved in the production of electric vehicles and related infrastructure can benefit from various subsidies and incentives provided by both the central and state governments, further promoting domestic manufacturing and boosting the EV ecosystem.
5. National Electric Mobility Mission Plan (NEMMP)
Launched in 2013, the NEMMP aims to achieve a target of 6-7 million EVs on Indian roads by 2025. In 2024, the plan was upgraded to focus on increasing EV market share, promoting R&D for next-generation technologies, and expanding the EV ecosystem, including charging infrastructure. Additionally, the plan encourages the use of EVs in government fleets and public transport systems.
6. Public Transport Initiatives and EV Fleets
The government has also prioritized electric mobility in public transport to further reduce emissions and promote sustainability. One of the key initiatives is the electrification of bus fleets, with the government providing subsidies to state transport corporations for the procurement of electric buses. The goal is to have over 50,000 electric buses operating across India by 2030, significantly reducing carbon emissions in urban areas. In addition, the government is encouraging companies like Ola and Uber to convert their fleets to electric vehicles. To support this transition, incentives are offered to fleet operators for the purchase of electric taxis and auto-rickshaws, which will play a crucial role in reducing urban air pollution and promoting cleaner transportation options.
7. PM E-Drive and New Initiatives
In October 2024, the government launched the PM E-Drive scheme, replacing the FAME policy. With a fund allocation of ₹3,679 crore, this initiative provides subsidies for purchasing electric two-wheelers, three-wheelers, e-ambulances, e-trucks, and other emerging EVs. The scheme also supports the establishment of critical charging infrastructure in cities like Delhi, Mumbai, Kolkata, and Bengaluru.
8. E-AMRIT Portal
Launched at the COP26 Summit, the E-AMRIT portal provides comprehensive information on EV adoption, policies, subsidies, and investment opportunities. Developed by NITI Aayog, the portal aims to raise awareness and encourage consumers to transition to electric vehicles.
9. State-Specific EV Subsidies and Policies
Additional state-specific subsidies and policies have been rolled out to promote EV adoption.
- Telangana: The state offers 100% exemption on road tax for electric two-wheelers, three-wheelers, four-wheelers, and buses. It also provides retrofitting incentives for e-autos.
- Delhi: Delhi grants a ₹5,000 scrapping incentive for electric two-wheelers and ₹7,500 for electric three-wheelers, in addition to interest subvention for loans on commercial EVs.
- Odisha: The state has implemented an open permit system for electric autos.
- Punjab: Punjab has proposed the establishment of special green zones in targeted cities to promote e-mobility.
- Bihar: Bihar offers toll fee waivers for electric vehicles on selected state highways.
| State/UT | E-Cycle | E-2W | E-3W | E-4W/Goods Carrier | E-Bus | Estimated Total Subsidy (₹) |
| Chandigarh | ₹3,000/cycle for 25,000 cycles | ₹30,000/vehicle for 10,000 vehicles | ₹30,000/vehicle for 1,000 vehicles | ₹5,000/vehicle for 3,000 vehicles | – | ₹67,50,00,000 |
| Punjab | ₹4,000/cycle for 5,000 cycles | – | ₹3,000/vehicle for 10,000 vehicles | ₹3,000/vehicle for 5,000 vehicles | – | ₹82,75,00,000 |
| Maharashtra | – | ₹5,000/vehicle for 1,00,000 vehicles | ₹5,000/vehicle for 15,000 vehicles | ₹5,000/vehicle for 10,000 vehicles | 10% of vehicle cost for 1,000 buses | ₹535,00,00,000 |
| Tamil Nadu | ₹5,000/cycle for 6,000 cycles | ₹10,000/vehicle for 6,000 vehicles | ₹10,000/vehicle for 15,000 vehicles | ₹10,000/vehicle for 3,000 vehicles | ₹20,000/bus for 300 buses | ₹225,00,00,000 |
| Jharkhand | – | ₹5,000/vehicle for 1,00,000 vehicles | ₹5,000/vehicle for 15,000 vehicles | ₹5,000/vehicle for 10,000 vehicles | 10% of vehicle cost for 1,000 buses | ₹437,00,00,000 |
Challenges and Future Outlook
India’s progress in promoting electric vehicles (EVs) faces several persistent challenges. Consumers continue to worry about range anxiety, uncertain about the distance EVs can travel on a single charge. Although improved battery technology addresses this concern, the government acknowledges that charging infrastructure remains limited, particularly in rural areas, making it difficult for EV owners to charge their vehicles conveniently.
The government identifies the high initial cost of EVs, despite subsidies, as another barrier, as they are still relatively more expensive than conventional vehicles. India’s reliance on imports for lithium-ion batteries, crucial for EVs, also poses a challenge.
To address these challenges, the government invests in infrastructure, advances battery technology, and introduces attractive financial incentives. These efforts drive exponential growth in India’s EV sector, making EVs more accessible and affordable for all, and ultimately, achieving a sustainable transportation ecosystem.
Conclusion
India’s electric vehicle policies in 2024 are robust and comprehensive, featuring a combination of central and state-level incentives, tax breaks, and support for manufacturers. These initiatives are designed to make EVs more affordable and accessible, aiming to reduce carbon emissions, pollution, and dependence on fossil fuels. While challenges such as infrastructure gaps and high upfront costs remain, the momentum towards EV adoption is strong. With continued investments and support, India is on track to become one of the largest and most dynamic EV markets in the world.