Promoting Electric Vehicles in India
The Indian government is actively promoting electric vehicles (EVs) to reduce pollution and dependence on fossil fuels. While direct subsidies for electric vehicles are not provided to state governments, various schemes incentivize consumers. The Ministry of Heavy Industries (MHI) has introduced several initiatives to encourage the adoption of EVs across the country, including the state of Punjab. These schemes aim to enhance manufacturing capabilities, support infrastructure development, and promote the use of electric vehicles.
Key Schemes for Electric Vehicle Promotion
One of the most significant initiatives is the Faster Adoption and Manufacturing of (Hybrid & Electric Vehicles in India) (FAME India) Scheme Phase-II. Launched on April 1, 2019, this scheme has a budget of ₹11,500 crore and is set to run for five years. It incentivizes various types of electric vehicles, including two-wheelers, three-wheelers, four-wheelers, buses, and public charging stations. The scheme aims to make EVs more accessible and affordable for consumers, thereby increasing their adoption.
Another important initiative is the Production Linked Incentive (PLI) Scheme for Automobile and Auto Component Industry in India (PLI-Auto). Approved on September 23, 2021, this scheme has a budget of ₹25,938 crore. It focuses on enhancing India’s manufacturing capabilities for Advanced Automotive Technology (AAT) products. The PLI-Auto scheme offers financial incentives to boost domestic manufacturing, ensuring a minimum of 50% Domestic Value Addition (DVA). This initiative is crucial for attracting investments in the automotive manufacturing value chain.
Advanced Chemistry Cell (ACC) Manufacturing
The government has also introduced the PLI Scheme for Advanced Chemistry Cell (ACC), approved on May 12, 2021. With a budgetary outlay of ₹18,100 crore, this scheme aims to establish a competitive domestic manufacturing ecosystem for 50 GWh of ACC batteries. These batteries are essential for the efficient functioning of electric vehicles. By promoting local manufacturing, the government seeks to reduce reliance on imports and enhance the overall sustainability of the EV ecosystem in India.
Additionally, the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) scheme was notified on September 29, 2024, with an outlay of ₹10,900 crore. This two-year scheme supports various electric vehicles, including two-wheelers, three-wheelers, trucks, buses, and ambulances. It also focuses on the establishment of EV public charging stations and the upgradation of testing agencies. Such initiatives are vital for creating a robust infrastructure that supports the widespread adoption of electric vehicles.
Supporting Infrastructure and Financial Incentives
The Indian government is also taking steps to improve the infrastructure necessary for electric vehicles. The Ministry of Power has issued guidelines for EV charging infrastructure, titled “Guidelines for Installation and Operation of Electric Vehicle Charging Infrastructure-2024.” These guidelines, released on September 17, 2024, aim to create a connected and interoperable EV charging network across the country. They also facilitate electricity connections for EV charging stations, making it easier for consumers to charge their vehicles.
Moreover, the Ministry of Finance has reduced the Goods and Services Tax (GST) on electric vehicles from 12% to 5%. This reduction significantly lowers the initial cost of EVs, making them more attractive to consumers. The Ministry of Road Transport & Highways (MoRTH) has also announced that battery-operated vehicles will receive green license plates and be exempt from permit requirements. This move encourages the use of electric vehicles by simplifying regulations and reducing costs.
In addition, the Ministry of Housing and Urban Affairs has amended the Model Building Bye-Laws to mandate the inclusion of charging stations in private and commercial buildings. This requirement will enhance the availability of charging infrastructure, further supporting the growth of electric vehicles in India.
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