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Electric Vehicle Policy in India for the Next Decade
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Electric Vehicle Policy in India for the Next Decade

Electric vehicles are the means of transport of the future for a sustainable environment. Several countries have started creating a roadmap for an electric vehicle only life. 


India has created its own electric vehicle policy as well. The transport ministry has showed ambitions to adapt and move to 100% electric cars by 2030. The aim was presented in the National Electric Mobility Mission Plan, which aims to empower electric vehicles through collaboration among the Government and various industries. 

The transition to electric mobility in India is not just about decreasing carbon emission, but it also helps address things like air pollution and energy security, while creating a new job industry. 

The current policies in India are very encouraging towards electric vehicles, and the biggest among them is Faster Adoption and Manufacturing of Electric Vehicles II (FAME II). It is a policy adopted earlier this year, and is estimated around worth 10,000 crores. The policy exempts electric vehicles from road tax as well as registration fees, which incentivises their purchase. The current road tax rate ranges from 4 to 10 percent of the cost of the vehicle, and the registration fees hovers around 3,000. In addition, buying an electric vehicle allows one a subsidy of 5,000 per kWh of the battery capacity up to 30,000. All of that combined provides a decent profit to electric vehicle buyers. 


Additionally, to tap into the electric vehicles market and boost their sales, the government has reduced the GST on electric vehicles from 12% to 5%. 

The government has also commenced several initiatives to create awareness and demand. It has invested in charging infrastructure through public enterprises as well as increased the number of electric bus tenders for public transport. 

All this helps create an ecosystem required to accelerate mass production and adoption of electric vehicles going forward.  


One of the biggest issues in the automobile industry is the problem of scrappage, and the government is offering scrappage incentives in its policy to make the transition easier for perspective buyers. 


However, despite all the steps in the right direction, there are still several shortcomings in the government policy towards electric vehicles. 

One of those is the glaring absence of a strong driver for the auto industry to invest in electric vehicle manufacturing as well as domestic battery production. Batteries are the most important part of an electric vehicle, and the government has failed to do enough to convince local manufacturers. The lack of domestic production of batteries not only shrinks the domestic automobile sector, but also worsens trade balance. 

Another worrying factor is the potential decrease in jobs during the move to electric vehicles. While the government has promised new employment opportunities, few studies suggest that the reduction in jobs related to engine and other ICE components exceed the increase in electric vehicles and components production. 

While the government has promised to build new charging points in the future, the lack of them, especially in smaller towns and cities across the country deters perspective buyers, so the government needs to really prioritise that part of its policy to encourage both buyers and investors alike. 


However, the current policy does provide a head-start for a smooth transition to electric vehicles in the future for consumers while also providing exciting opportunities to perspective manufacturers and investors to tap into a potential booming business.


Syndicate Motors is a manufacturer of electric vehicles that combat environmental issues and economic issues in India. Join us in our fight for a sustainable environment as well as a cleaner and greener India.


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