10 Drivers of EV Market in India

The cabinet has approved the budget of ₹100 billion under the FAME II program.


The Indian government launched the National E-Mobility Program in March 2018 to achieve 100 percent e-mobility by 2030. Since then, the country has taken several policy initiatives to propel the growth of electric mobility in the country.

These initiatives have come from many ministries and departments such as – 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, and Ministry of New and Renewable Energy.

Several states like Delhi, Kerala, Maharashtra, Karnataka have also formulated their own electric vehicle policies while others are in the process of doing so.

Here is a list of policy initiatives that support the implementation of electric mobility in India


The Union Cabinet 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) with a total budget of ₹100 billion ($1.41 billion). The duration of the program is three years with effect from April 1, 2019.

For the three and four-wheeled electric vehicles (e-3W and e-4W) segment, incentives will be applicable mainly for vehicles used for public transport or registered for commercial purposes.

Amendments to Model Building By-Laws 

The Town and Country Planning Organization, Ministry of Housing, and Ministry of Urban Affairs have released amendments to Model Building By-Laws (MBBL) to provide for EV charging infrastructure for residential and other buildings (including group housing buildings).

According to the amendments, any charging station installed at a public or private area or building premises of any category that caters to the commercial mode of charging of EVs will be considered as a “Public Charging Station.”

EV Charging Station Guidelines

The Ministry of Power announced guidelines and standards for the development of electric vehicle charging infrastructure in India.

According to the guidelines, the tariff for supply of electricity to EV charging station at a private charging place like at residences and offices will not be more than the average cost of supply plus 15%. Any charging station can also obtain electricity from any generation company through open access protocols.

No License Required

The Ministry of Power has issued a clarification stating that no license is required to operate EV charging stations in India. The reasoning for making it license-free is that the government considers EV charging station as a service and not the sale of electricity.

Phased Manufacturing Program

To promote domestic manufacturing of electric vehicles, the government has proposed a phased manufacturing roadmap to create a manufacturing ecosystem in the country.

As per the phased manufacturing proposal, the government has imposed 15% customs duty on parts that are used to manufacture electric vehicles such as AC or DC charger and motor, energy monitor, brake system for recovering, electric compressor, power control unit, and others. The revised duty under PMP has been proposed from April 2021. Currently, there is no duty on these parts.

Rationalization of Taxes and Duties

The government has lowered the customs duty on import of EV components to 10-15%. So far, EV components imported for assembly in India attracted the import duty of 15-30%. However, with this move, the assembled parts and components will now attract a duty of 15% and above up to 60%.

The government has also slashed the rate of the Goods and Services Tax on lithium ion (Li-ion) batteries from 28% to 18%.

Transfer of Technology

Recently, Vikram Sarabhai Space Centre (VSSC), a part of Indian Space Research Organization (ISRO), invited applications regarding the Request for Qualification for the commercialization of its indigenously developed Li-ion cell technology. So far, ten firms have been shortlisted for the transfer of technology.

Green Number Plate

The Ministry of Road Transport & Highways has announced that that battery-operated vehicles, both private and commercial, will be given green license plates.

Permits not Required

The Ministry of Road Transport and Highways also announced that all battery-operated, ethanol-powered and methanol-powered transport vehicles would be exempted from the requirement of permits.

Public-Private Partnership

The National Institute of Transforming India (NITI) Aayog has issued a model concession agreement for public-private partnership (PPP) aimed at the operation and maintenance of electric buses in cities across the country.

Under this model, the holder of concession will be required to incur the necessary capital expenditure (CAPEX) for the procurement of electric buses, and operation and maintenance infrastructure and the authority will incur operational expenditure on per kilometer basis.