MHI provides key information on phase II of FAME India scheme

As per a written reply in the Lok Sabha by the union minister of state for heavy industries, Krishan Pal Gurjar, under phase-II of FAME India scheme, 745,713 electric vehicles (EV) have been supported till December 7, 2022 by way of demand incentives amounting Rs 32 billion. Further, the Ministry of Heavy Industries (MHI) has sanctioned 6,315 electric buses to 65 cities, STUs, CTUs, state government entities for intracity and intercity operations across 26 states and union territories under the scheme. 

The minister of state mentioned that the Indian government has taken the following steps to address the challenges in the country’s adoption of electric mobility:

One, from June 11, 2021, the demand incentive under phase II of FAME India scheme has been increased to Rs 15,000 per kWh from Rs 10,000 per kWh with an increase in cap from 20 per cent to 40 per cent of the cost of vehicle. This will enable the cost of electric two wheelers to be at par with that of internal combustion engine two-wheeler vehicles. Further, on June 25, 2021 phase II of FAME India scheme was extended for a period of 2 years upto March 31, 2024.

Two, the government on May 12, 2021 approved the production linked incentive (PLI) scheme for manufacturing of the advanced chemistry cell in order to bring down prices of batteries in the country. The drop in battery prices will result in cost reduction of EVs.

Three, EVs are covered under the PLI scheme for automobile and auto components which was approved on September 15, 2021 with a budgetary outlay of Rs 259.38 billion for a period of five years.

Four, the GST on EVs has been reduced from 12 per cent to 5 per cent. The GST on chargers and charging stations for EVs has been reduced from 18 per cent to 5 per cent.

Five, the Ministry of Road Transport and Highways (MoRTH) announced that battery operated vehicles will be given green licence plates and will be exempted from permit requirements.

Six, MoRTH issued a notification advising states to waive road tax on EVs which will help reduce the initial cost of EVs.

The Government notified phase-II of faster adoption and manufacturing of hybrid and EV in India for a period of five years commencing from April 1, 2019 with a total budgetary support of Rs 100 billion.  This phase mainly focuses on supporting electrification of public and shared transportation and aims to support through demand incentives.