Government Policy for Electric Vehicles in India: FAME India Scheme

The article discusses the freedom, restrictions, privileges and formalities set by such policies adopted under the schemes of Central and St

The Government of India has been actively pushing for low carbon-emission alternatives in the automobile industry by laying down a framework and introducing policies that encourage electric vehicles in India. The increasing number of electric vehicle launches by automobile manufacturers and the upcoming Tesla factory in Karnataka reflect the steady progress that Indian electric vehicle industry is making as these policies are being implemented. The main agencies of the Government responsible for policy-making and laying down the legal framework with regard to electric vehicles are:
  • Ministry of Power
  • Ministry of Road Transport and Highways (MoRTH)
  • Ministry of Housing and Urban Affairs (MoHUA)
  • Department of Heavy Industry (under the Ministry of Heavy Industries and Public Enterprises)
  • National Automotive Board (NAB)
Through these agencies, the Government has come up with many plans and schemes for achieving its ambitions of developing India’s automobile future. Some of them are:
  • National Electric Mobility Mission Plan 2020
  • Scheme for Faster Adoption and Manufacturing of (Hybrid and Electric) Vehicles in India Phase I (FAME Phase I)
  • Scheme for Faster Adoption and Manufacturing of (Hybrid and Electric) Vehicles in India Phase II (FAME India Phase II)
National Electric Mobility Mission Plan 2020
  • The National Electric Mobility Mission Plan 2020 was launched by the Department of Heavy Industry (DHI) to provide a vision and blueprint for faster adoption of electric vehicles in India.
  • It was based on the following three prongs:
  1. enhancing fuel security of the nation
  2. providing transportation which is affordable and environment friendly
  3. transforming India into a manufacturing leader
  • Under this plan, in 2015, the DHI formulated the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME India) Scheme.
Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME India) Scheme

FAME India Scheme Phase I
  • The FAME India Scheme Phase I was launched by the Ministry of Heavy Industries and Public Enterprises in 2015 and stayed in effect till 31st March, 2019.
  • Its purpose was to “incentivize the production and promotion of eco-friendly vehicles including electric vehicles and hybrid vehicles”.
  • Under Phase I of the scheme, the Government had set a target of achieving 6 to 7 million sales of hybrid and electric vehicles by 2020.
FAME India Scheme Phase II
  • FAME India Scheme Phase II was launched as an expanded version of its Phase I counterpart.
  • It started from 1st April, 2019, with a three-year plan of continuing upto 31st March 2022 and an outlay of INR 10,000 crore for the three years.
  • Its purpose is to provide a push to electric vehicles in public transport and encourage their adoption through market creation and demand aggregation.
  • It has been developed with a holistic approach directed towards creating charging infrastructure, research and development of EV technologies and indigenization of the industry.
  • With a special focus on public transportation, the Government is offering incentives for three-wheeler and four-wheeler electric vehicles and electric buses to be used for commercial purposes.
  • The scheme also covers hybrid vehicles and vehicles with sizeable lithium-ion battery and electric motor.
  • It is also offering incentives to manufacturers investing in developing electric vehicles, their components, lithium-ion batteries, and electric motors.
  • Department of Heavy Industries is the nodal department of the Government of India which is responsible for planning and review of the scheme. It has the power to issue guidelines whenever it deems necessary, to implement the objectives set by the Government of India.
  • An Inter-Ministerial Empowered Committee called the Project Implementation and Sanctioning Committee (PISC) looks after the monitoring, sanctioning and implementation of the scheme.
  • The committee has the power to:
  1. Sanction any assistance for projects under the scheme.
  2. Modify the parameters for various components of the scheme based on the emerging requirements.
  3. Resolve any issues that come up during the implementation of the scheme.

    Where Do the Incentives Apply?
  • Buses priced up to INR 2 crore
  • Strong and plug-in hybrids below INR 15 lakh
  • Three-wheeler vehicles under INR 5 lakh
  • Two-wheeler vehicles under INR 1.5 lakh
Incentives Details:
  • For two-wheelers, three-wheelers and four-wheeler, incentive scheme of INR 10,000 per kilowatt, depending on the size of the vehicle’s battery.
  • Units for electric buses, incentive scheme of INR 20,000 per kilowatt is offered to state transport units. This incentive is offered on the basis of operational expenditure by the state transport units.
  • These incentives are reviewed periodically by the PISC.
Impact on Charging Infrastructure
  • The scheme aims to bring together the public and private sector to participate in setting up of charging stations.
  • It provides for setting up charging stations starting with Tier-1 cities and expressways and highways that form busier corridors.
  • It targets to set-up at least one slow-charging unit for every electric bus and at least one fast-charging station for every 10 buses.
  • The scheme aims at interlinking renewable energy sources such as solar energy with charging infrastructure.
Policies Adopted by Various States Following the FAME India Scheme

Delhi – Delhi Electric Vehicle Policy
  • The policy aims at constituting 25% of all new vehicle registrations to be electric vehicles by 2024.
  • It includes provisions for:
  1. Constitution of State Electric Vehicle Board.
  2. Establishment of a dedicated electric vehicle cell.
  3. Developing a public outreach programme to create awareness about the benefits of electric vehicles and the key elements of the policy.
  4. Setting up of skill centres for training related to jobs in the electric vehicle eco-system and creation of job opportunities.
  5. Setting up of recycling for batteries.
  6. Creation of a ‘State EV Fund’ which would be funded through the air ambience fund and levy of additional taxes, cess, fee etc. on polluting vehicles.
  • It provides incentives on purchase and use of electric two-wheelers, over and above the Central Government’s FAME II Scheme.
  • Incentives include:
  1. Direct subsidies on purchase of electric vehicles
  2. Exemption from road tax
  3. Waiver of registration fee
  4. Waiver of interest on loans for commercial buyers
  • It also includes framework for setting up charging stations and swappable battery stations, and shifting Delhi’s public transport towards electrification.
Uttar Pradesh – Uttar Pradesh Electric Vehicle Manufacturing and Mobility Policy
  • The policy aims at setting up both slow and fast charging stations, and battery-swapping stations.
  • It further aims to transform the public transport system, with an aim of 70% electric vehicles in public transport by 2030.
  • It provides for a single window system for approvals for electric vehicles and battery manufacturing units.
  • Incentives include:
  1. Waiver of interest
  2. Exemption from stamp duty
  3. Exemption from electricity duty
  4. Reimbursement of state GST

Maharashtra – Maharashtra Electric Vehicle Policy

The policy aims to
  • Constitute 10% of all new vehicle registrations to be electric vehicles by 2025.
  • Replace all government vehicles in major cities with electric vehicles.
  • Convert 25% of the existing public transport infrastructure in Mumbai Metropolitan Region, Aurangabad, Pune, Nagpur, and Nashik to fully electric mode by 2025.
  • Convert 15% of Maharashtra State Road Transport Corporation’s existing bus fleet to electric buses.
  • Recycle lithium ion batteries and other electronic waste.
  • As the leading manufacturer of internal combustion engines, it aims to be the leading manufacturer of electric vehicles as well.
  • Provide full-scale electric vehicle infrastructure on four major arterial highways by 2025:
  1. Mumbai-Pune Express Highway
  2. Mumbai-Nagpur Expressway
  3. Mumbai-Nashik Highway
  4. Nashik-Pune Highway

Haryana – Haryana Electric Vehicle Policy
  • The state targets converting 100% of its bus fleet in Gurugram and Faridabad to electric vehicles by 2024.
  • Further, it targets to convert 100% of its bus fleet in the entire state to be electric vehicles by 2029.
  • The Government of Haryana is looking to allocate 100 to 200 acres of land for developing Electric Vehicle Parks with plug and play internal infrastructure, common facilities and necessary external infrastructure.
  • Besides this, it aims at establishing a supply of uninterrupted power to all electric vehicle related industries in the state.
Karnataka – Karnataka Electric Vehicle and Energy Storage Policy
  • Being one of the pioneers of electric vehicle policy-making, Karnataka aims to develop itself into the most preferred destination for electric vehicle and mobility development. Its policy is aimed at:
  1. Attracting investment
  2. Creating job opportunities
  3. Developing human capital to meet the needs of the industry
  4. Provide opportunities for research and development in electric mobility
  5. Karnataka Budget 2020-21 proposes to establish ‘Electric Vehicles and Energy Storage Manufacturing Cluster’ with a grant of INR 10 crore.
Under the Fame India Phase II scheme, 300 AC electric buses are being added to the fleet of Bengaluru Metropolitan Transport Corporation and the State Government is providing a grant of Rs. 100 crore for adding 500 ordinary electric buses to the fleet.