Electric Vehicle Policy — Imperative for EV Propagation

Parag Diwan
9 min readSep 25, 2019


The Government of India has already signaled the beginning of a new era of mobility for India. Global pressure on reduction of carbon footprint and India’s growing economy has put a focus on electrification of transportation. The policy development presents India with a great and timely opportunity to emerge as a global leader in new mobility solutions. India is uniquely positioned to deploy electric vehicles (EVs) at scale, leapfrogging traditional mobility models that have led to air pollution and dependence on crude oil import. However, government needs to have well defined policies and a realistic roadmap for India to achieve this goal.

Government Initiatives:

  • In 2012, the National Electric Mobility Mission Plan (NEMMP) 2020 was established to promote hybrid and electric vehicles.
  • Under the NEMMP 2020, an incentive scheme, Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME Phase 1 &2), was launched in 2015 to reduce the upfront purchase price of hybrid and electric vehicles and to stimulate their early adoption
  • In early 2018, the Ministry of Power launched the new National Electric Mobility Programme to focus on creating the charging infrastructure and a policy framework to set a target of more than 30% electric vehicles by 2030
  • The Programme will be implemented by Energy Efficiency Services Limited (EESL) which will aggregate demand by procuring electric vehicles in bulk to get economies of scale
  • Ministry of Power (MoP) has notified the charging infrastructure for electric vehicles-guidelines and standards on 14th December 2018
  • Special incentives for Indigenous OEM and EV manufacturers were announced under FAME
  • Many state governments like Delhi, Maharashtra, Tamilnadu have announced state policies for adoption of EV

Ministries and Agencies involved in Electric Vehicle programme in India:

At the central level, several ministries and departments have been involved in supporting the electric mobility transition, including the Ministry of Road Transport and Highways, Department of Heavy Industry, Department of Industrial Policy and Promotion, Ministry of Finance, Ministry of Housing and Urban Affairs, Ministry of Power, Ministry of New and Renewable Energy, Department of Science and Technology and NITI Aayog.

Additionally, 27 states have formulated strategies for transforming their mobility systems and several states have formulated or are in the process of formulating their EV policies.

Snapshot of Initiatives of various Government Bodies

National Electric Mobility Mission Plan (NEMMP)

Government of India launched the National Electric Mobility Mission Plan (NEMMP) 2020 in 2013. It aims to achieve transformation by reduction in internal combustion vehicles through promotion of hybrid and electric vehicles. Initially, an ambitious target of putting on road 6–7 million of hybrid and EVs y-o-y from 2020 on wards. To support this initiative, Government decided to provide fiscal and monetary incentives to kick start this industry. Government has launched the scheme namely Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME India) under NEMMP 2020 in the Union Budget for 2015–16 with an initial outlay of Rs. 795 Cr. Since then, there have been steps that have led early market creation through demand incentive, in-house technology development and domestic production.

FAME 1 :

The release of the Faster Adoption and Manufacturing of Electric Vehicles (FAME) Scheme provided an opportunity to jack start India’s recent progress in electric mobility future. FAME-1 was launched on 2015 and was extended upto March 31, 2019. Approximately 2,20,000 EVs were put on road through FAME-1 scheme by July 2018.

Some statistics of FAME1 achievements

Fund Allocation of FAME 1:


The second phase is an expanded version of the first phase.

FAME 2 has a total outlay of Rs 10,000 Crores ($1.4 billion) over the period of three years from 1st April 2019 to 2022.

The disbursement of these funds would be in tranches of 1500 crores, Rs 5,000 crore, Rs 3,500 crore during first three years of the scheme. FAME-2 will cover public buses using EV technology; electric, plug-in hybrid and strong hybrid four wheelers; electric 3-wheelers including e-rickshaws and electric 2-wheelers. For the overall monitoring, sanctioning and implementation of the scheme, an inter-ministerial empowered committee — ‘Project Implementation and Sanctioning Committee’ (PISC) has been constituted. Last year, the Ministry of Power launched the new National Electric Mobility Programme with broad objectives focusing on; establishing the electric charging infrastructure and a policy framework to set infrastructure right to have more than 30% EVs in total vehicle pool, by 2030.

Fund Allocation for FAME 2:

Various Initiatives by Ministries and other Government institutions

Ministry of Power (MoP):

  • MoP issued a policy on charging infrastructure to enable faster adoption of EVs. The policy permits private charging at residences and offices where tariff for supply of electricity to EV charging station will not be more than the average cost of supply plus 15 percent
  • MoP issued a clarification stating that charging EVs is considered a service, not a sale of electricity, meaning that no license is required to operate EV charging stations

Ministry of Road Transport and Highways (MoRTH):

  • MoRTH announced that battery-operated vehicles, both private and commercial, will be given green license plates (GSR 749 (E))
  • MoRTH announced that it will facilitate the import of 2,500 electric vehicles compliant with international standards without the need for homologation (GSR 870 (E))
  • MoRTH announced that all battery-operated, ethanol-powered and methanol-powered transport vehicles will be exempted from the requirement of permits (S.O. 5333(E))
  • MoRTH amended Central Motor Vehicles Rules (CMVR), 1989 to allow driving licenses to be given for age group 16–18 years to drive gearless electric scooters and bikes up to 4 kWh battery size (GSR 1225 (E))

Ministry of Housing and Urban Affairs (MoHUA):

  • MoHUA released an amendment of building code and town planning rules for provisioning of EV charging stations in private and commercial buildings

Ministry of Finance (MoF):

  • MoF rationalized the customs duty for all categories of vehicles, battery packs and cells to support Make in India and incentivize uptake of electric vehicles (Notification no. 03/2019-Customs)
  • Reduced GST rates for the purchase of electric vehicles from 12% to 5% (Financial Budget 2019)
  • Announced an income tax rebate of Rs. 1,50,000 on purchase of electric vehicles (Financial Budget 2019)

NITI Aayog:

  • The Cabinet approved the National Mission on Transformative Mobility and Battery Storage, which will drive clean, connected, shared, sustainable and holistic mobility initiatives
  • The Mission aims at creation of a Phased Manufacturing Programme (PMP) for five years, to support setting up of large-scale, export-competitive integrated batteries and cell-manufacturing giga plants in India, as well as localizing production across the entire electric vehicle value chain
  • NITI Aayog released a concessionaire Agreement for public private partnership in operation and maintenance of electric buses in cities through Operating Expenditure (OPEX) model. This would reduce the requirement of upfront capital as the lease would be signed on a per-kilometer basis

Department of Heavy Industry (DHI):

  • The Cabinet approved FAME 2, the second phase of the scheme for Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India
  • The scheme has a total outlay of Rs. 10,000 crores($1.4 billion) to be used for upfront incentives on the purchase of EVs as well as supporting the development of charging infrastructure.

Department of Science and Technology (DST):

  • DST launched a Grand Challenge for developing the Indian Standards for Electric Vehicle Charging Infrastructure
  • Additionally, Bureau of Indian Standards (BIS) has notified general requirements for EV charging based on CCS & CHAdeMO charging standards

Indian Space Research Organisation (ISRO):

  • Indian Space Research Organisation (ISRO) issued a request for quotation (RFQ) document for commercialization of indigenously developed lithium-ion battery technology. Thus far, ten firms have been shortlisted for the transfer of technology.

Industry Initiatives:

Vehicle Manufacturing and Sales:

According to market estimates, in financial year 2018 electric two-wheeler sales almost doubled to 54,800 compared to the previous financial year. Electric 2-wheelers have been leading the EV market; estimates suggest they account for 98% of the country’s EV sales.

Manufacturers, established and new, continue to/are starting to invest in the Indian EV market through fund infusion, investments in start-ups and expansion plans. Companies are designing and testing products suitable for the Indian market with a key focus on electric 2-wheelers and 3-wheelers. OEMs have been forging partnerships with state and city governments such as Delhi, Pune, Ahmedabad and Bengaluru to augment the public transport system to bolster shared mobility. As recently as March 2019, over 100 companies showcased electric vehicles of all types at the India E-Vehicle Show.

Components and Battery Manufacturing:

The Indian government reduced tariffs on imported parts of EVs in January 2019 to boost assembly in India. The automobile industry has indicated that this will trigger investments in critical components. Battery manufacturers have announced major joint venture investments to produce both battery cells and packs in India with an aim to contribute to the ‘Make in India’ drive. Several manufacturers, energy solution providers and start-ups have announced their plans to make lithium-ion batteries in India through R&D centers and lithium-ion battery manufacturing plants.

India is likely to see a surge in new cell manufacturing units in India with key players lining up their long-term plans. Ten companies have come forward to adopt Indian Space Research Organisation’s (ISRO) cell chemistry for commercial applications.

Charging Infrastructure and Battery Swapping:

Significant investment is being mobilized by the private sector to manufacture and install electric vehicle supply equipment (EVSE) infrastructure across India. This includes both battery charging and battery swapping technologies. Both charging and swapping solutions are supported by business model innovation that enables high utilization of infrastructure. Plans are underway to fuel EVs with clean power, with industry players exploring solar-plus-EV technology in Mumbai and beyond. Moreover, the Indian Railways has announced its intention to allocate space for electric vehicle charging stations at their station parking lots. Railways authorities aim to invite private sector participation by issuing tenders to create this infrastructure. Public sector units in India have signed several Memorandums of Understanding (MoUs) with aggregators to develop dedicated EV charging stations across Indian cities.

Mobility Services:

Mobility service providers around the world and in India are testing EV solutions in anticipation of wider-scale deployment. Compelling economics are encouraging aggregators and drivers to act on EVs’ low operating costs, which can offset their capital cost premium. Despite competitive economics, persistent challenges exist including the operational mandates of service vehicles, risk aversion from drivers and fleet operators, and the first cost difference between ICEs and EVs.

In order to address some of these challenges and capture the economic advantages of EVs, taxi aggregators and car rental platforms have formed partnerships with original equipment manufacturers (OEMs) to manufacture and test fit to purpose vehicles.


In the last few years, we have witnessed massive advancements, notably in terms of technology but also in the people’s attitude towards the environmental impact of cars and other mobility solutions. While the EVs market is currently a lucrative destination for corporates and start-ups in India, there are still quite a few challenges that need to be overcome to make EVs ready for mass adoption. Manufacturing electric vehicles domestically, for instance, comes with the hurdle of high costs.

Similarly, production of batteries is largely an expensive affair. To be able to rise above these challenges, the Indian government will have to focus its efforts on facilitating technological disruption. If successful, the shift to EVs could potentially help India save up to $300 billion in oil imports and nearly 1 gigatonne of carbon dioxide emissions by 2030, as per a recent report by FICCI and Rocky Mountain Institute.

Furthermore, EVs will be a stepping stone towards designing an intelligent, futuristic transport infrastructure in India that is capable of catering to the mobility needs of the country’s huge population.



Parag Diwan

A noted academic leader, is at the vanguard of research and curriculum design across disciplines to usher in Education.40. Evangelist & Advisor to universities