Next month, when it announces its budget, India is expected to launch a third phase of its program aimed at encouraging the use of electric vehicles. According to people with knowledge of the situation, the upcoming Faster Adoption & Manufacturing of Electric Vehicles (FAME) scheme is expected to fund the purchase of electric two-, three-, and four-wheelers with a proposed budgetary provision of about INR 10,000 crore.
During the meetings, senior authorities hinted that FAME III might be announced at the time the complete budget is disclosed. The Prime Minister’s Office has already received a thorough plan from the Ministry of Heavy Industries, which is in charge of overseeing this program, for evaluation. Considering the present state of the economy, a definitive decision about this idea is anticipated soon after the budget is presented.
The plan is still being considered, which emphasizes how important it is to keep supporting electric cars in order to increase their usage on Indian roads. According to officials, the government sees green mobility as an essential part of its plan to lessen dependency on fossil fuels.
In reaction to past abuses seen in earlier phases of the system, the upcoming policy is set to include a criterion for enterprises applying for subsidies to verify their real manufacturing capability.
Launched in 2015, the first FAME project included a cash commitment of INR 5,172 crore. FAME II, which had a budget of INR 10,000 crore and an expiration date of March 31, 2024, came after it in 2019.
In the meantime, incentives for electric two- and three-wheelers were provided by the government through the launch of the 500 crore Electric Mobility Promotion Scheme (EMPS) 2024. Up to 10,000 for electric two-wheelers and up to INR 50,000 for electric three-wheelers were available under this scheme; however, the subsidies were cut to less than half of what FAME II gave.
As part of the EMPS, which supported the sales of 38,828 three-wheelers and 333,387 two-wheelers, subsidies for electric four-wheelers were fully withdrawn. These incentives were only accessible to Indian enterprises who could demonstrate a substantial level of local manufacturing capability. This was different from the FAME II requirements, which called for a phased manufacturing program intended to progressively improve local capacity for producing electric vehicles. To further improve safety requirements, the EMPS only covered automobiles with cutting-edge batteries.
