EV Central Policy: Tracing key milestones

The growth engine of the electric vehicle market would be fuelled by various drivers, of which strong governmental push and affordability would play key roles. NITI Aayog is targeting 30% EV penetration in India by 2030. To make EV adoption easier for manufacturers and consumers, the Government of India has taken some keys steps in the last few years.

EV policy

Source: JMK Research

NEMMP 2020

In 2013, the Government of India launched NEMMP 2020, intending to reduce dependence on crude oil for transportation by promoting electric vehicles in India. Department of Heavy Industries (DHI) had estimated Government support in the range of INR 135 – 153 billion for R&D and building EV infrastructure. By providing fiscal incentives in the nascent stage of development, the Government aimed a humongous target to attain 6-7 million electric vehicle sales year on year from 2020 onwards.


Under the national mission, DHI formulated the Faster Adoption and Manufacturing of Hybrid and Electric vehicles (FAME) scheme with an approved financial outlay of INR 7.95 billion for a period of two years. The focussed areas of development in this scheme were R&D of pilot projects, charging infrastructure and demand creation. The demand incentive provided under the scheme could directly be availed by the buyers upfront at the point of purchase. The two years scheme was later extended for another two years up to 31st March 2019. FAME – I had a planned budget allocation of 7.95 billion as demand incentives, but only 5.29 billion was allocated in over four years. The subsidies were applicable for two-wheelers, three-wheelers, passenger cars, light commercial vehicles, and buses.


In March 2019, DHI notified phase II of the FAME scheme with a total budget outlay of INR 100 billion until March 2022. FAME – II proposes INR 86 billion as demand incentives to be provided upfront during the purchase of EVs. To encourage public transport, the buses would receive a subsidy of 40% of the cost of vehicles, and a 20% subsidy would be given to other commercial vehicles. The scheme would cover incentives for 1.56 million vehicles until 2022. To provide a further push to clean public mobility, the DHI approved a sanction of 5595 electric buses to 64 cities, state government entities, State Transport Undertakings (STUs) for intra-city and intercity operation under the scheme. Fund allocation under the FAME-II scheme is focussed more towards demand incentives and setting up charging infrastructure.

EV policy

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