It can be argued that the Indian EV market was generated by a series of incentives and policies such as the FAME India Scheme created to address the need for sustainable transportation. As it is 2025, the measures include monetary subsidies, taxation, and improvements in infrastructures which enhance EVs’ accessibility to consumers.
FAME India Scheme: Boosting the Adoption of EVs
The national EV promotion strategy revolves around the Faster Adoption and Manufacturing of (Hybrid&) Electric Vehicles in India (FAME India) Scheme. Started in 2015 now in Phase II which was launched on 1st April 2019 with a budgetary allocation of ₹11,500 crore. This phase aims at the electrification of public and shared transportation and offers benefits for electric two-wheelers (e-2Ws), three-wheelers (e-3Ws), four-wheelers (e-4Ws), e-buses, and creating EV public charging stations.
As of 11th March 2025, FAME II has supported the sale of 14,28,009 e-2Ws, 1,64,523 e-3Ws, and 22,548 e-4Ws. Grants have also been approved for e-buses deployment and EV public charging points, which will help boost the EV ecosystem countrywide.
Union Budget 2025-26: City-By-City Encouragement of EVs
Key measures announced in the Union Budget 2025-26 to accelerate the growth of the EV industry:
- Tax Incentives: The Budget proposed to remove the Basic Customs Duty (BCD) on some essential minerals used for electric vehicle (EV) batteries to promote the local manufacture of lithium-ion batteries and to make EVs more affordable.
- Infrastructure Development: Major investments made for developing EV infrastructure, such as charging stations and manufacturing, have made India a potential center for EV manufacturing across the world.
Production Linked Incentives (PLI) Scheme: Promoting Local Manufacturing
The PLI scheme, to the tune of ₹25,938 crore for five years, aims to boost India’s edge in the automobile manufacturing sector. This makes it an attractive market for global EV manufacturers, and further aids the local EV sector as well.
PM E-DRIVE Scheme: Supporting Sustainable Mobility
PM E-DRIVE Scheme — ₹10,900 crore for Sustainable Mobility Initiatives This supports existing schemes and aims at promoting the adoption of electric passenger vehicles in India and complements existing incentives.
State Initiatives — Targeted Incentives for EV Purchasers
Several states also have provided their incentives to incentivize EV adoption:
New Delhi: In a significant step in the direction of faster adoption of electric vehicles and reducing pollution levels, the Delhi government on Saturday said it would not register any new petrol, diesel or CNG two-wheeler in the national capital from August 2026.
Challenges and the Road Ahead
However, things such as limited access to charging infrastructure and consumer awareness still remain hurdles. Addressing these challenges while continuing with policy reforms and infrastructure is the way forward as the government aims for an electric vehicle (EV) penetration of 30% by 2030.
Conclusion
The Indian government is working towards electric mobility with a multi-layer approach, which includes financial and tax incentives, as well as infrastructural support. These initiatives have great potential to be further developed, making EVs more accessible and affordable and enabling a more sustainable, environmentally friendly transportation ecosystem.
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