India’s ₹100 Billion Budget to Promote Adoption and Manufacturing of Electric Vehicles

The Union Cabinet has approved the proposal for the implementation of a program titled ‘Faster Adoption and Manufacturing of Electric Vehicles in India Phase II (FAME India Phase II)’ aimed towards the promotion of electric mobility in the country.

The program has a total budget of ₹100 billion ($1.41 billion), which is expected to be deployed over a period of three years with effect from April 1, 2019. The program is the expanded version of FAME India I which was launched on April 1, 2015, with a total outlay of ₹8.95 billion (126.2 million).

The objective of FAME is to encourage faster adoption of electric and hybrid vehicles by way of offering upfront incentives on the purchase of electric vehicles and establishing necessary charging infrastructure for electric vehicles. According to the statement released by the government, the program will help in addressing the issue of environmental pollution and fuel security.

It is expected to emphasize on electrification of public transportation including shared transport by providing demand incentives on operational expenditure mode for electric buses; these incentives are expected to be delivered through state or city transport corporation (STUs).

For the three and four-wheel electric vehicles (e-3W and e-4W) segment, incentives will be applicable mainly for vehicles used for public transport or registered for commercial purposes. In the two-wheel electric vehicles (e-2W) segment, the focus will be on the private vehicles. This program plans to support one million e-2W, 5 million e-3W, 55,000 e-4W, and 7,000 e-buses.

To encourage advanced technologies, the incentives will be extended to those vehicles which are fitted with advanced batteries such as lithium-ion or other new technology batteries.

The FAME program proposes establishment of charging infrastructure, through which, about 2,700 charging stations will be established in metros, other million plus (population) cities, smart cities, and cities in hilly states across the country so that there is availability of at least one charging station in a grid of 3 kilometers (km) x 3 km.

Establishment of charging stations is also proposed on major highways connecting major city clusters. Further, development of vehicle charging infrastructure is proposed for these highways on both sides of the road at an interval of about 25 km each.

The government had launched the FAME program with an initial outlay of ₹750 million (~$11.56 million) to provide a major push for the early adoption and creation of a market for both hybrids and EVs. The FAME Program covers all vehicles ― two-wheelers, three-wheelers, four-wheelers, and buses. The incentives to be provided are based on the type and make of any given vehicle.

In an exhaustive report, Mercom analyzed the EV hotspots in the country that are poised to lead India’s EV revolution.

Recently, Mercom reported on amendments in Model Building By-Laws to provide for electric vehicle charging infrastructure for residential and other buildings (including group housing building). Amendments in Urban and Regional Development Plans Formulation and Implementation Guidelines were also released to provide for the development of charging infrastructure on roads and highways.

Shaurya Bajaj is a staff reporter for