What are the latest subsidies you get on EVs in India?

The Indian Government has actively been promoting the adoption of EVs and other sustainable means of transport to achieve the country’s common carbon neutrality goal. Thus to promote electric and hybrid mobility, the Government of India introduced the Fame India Scheme in 2015. FAME stands for “Faster Adoption and Manufacturing of Electric and Hybrid Vehicles in India”. Under this scheme, the buyers can avail incentives via subsidies that reduce the actual cost of the EV. 

Subsidies have been reduced recently and thus electric two-wheeler manufacturers such as Ola Electric, Ather Energy, Bajaj Auto, and Hero Vida have hiked prices on their electric scooters. 

What is the FAME India scheme?

This FAME scheme offers incentives for the quicker adoption of electric and hybrid vehicles in India. This scheme forms a part of the National Electric Mobility Mission Plan and was launched by the Ministry of Heavy Industries and Public Enterprises. 

The FAME India subsidies can be availed by customers looking to buy EVs. State governments offer subsidies over and above the Central Government subsidies that bring down the cost of EVs considerably. However, state subsidies can be direct or indirect in nature. Many states in India do not offer subsidies on the cost of the car but compensate customers with a concession on road tax. 

Buyers who are looking to get an EV will be greeted by attractive subsidies that the central and state governments are offering in India. The concession that is being offered reduces the upfront cost of buying a new EV. This makes EVs accessible to a larger audience.

The incentives are calculated on the basis of the size of the Li-ion battery pack on a two-wheeler. The FAME II subsidies in India have gone through multiple corrections and as per the latest norms, the Indian Government will be extending incentives worth Rs 10,000/kWh to EV buyers. The governing bodies have also imposed a maximum cap of incentives to 15 percent of the total EV value.

Buyers who want to finance their new vehicle purchase via a loan can get tax benefits of up to Rs 1.5 lakhs. The State Government incentives to boost quicker EV adoption also includes concession on Road Tax and Registration costs of a new EV.

However, there are limitations as to which electric two-wheelers and cars qualify for such subsidies. 

State-wise EV subsidies in India

The FAME India scheme incentive is assisted by some other state-level subsidies that are extended to buyers in varying capacities across states. Most states over these incentives on electric two-wheelers and too are calculated on the basis of the battery capacity of the EV. There is however no update if the state subsidies have been reduced after the central government recently cut incentives delivered via the FAME II scheme. 

Delhi Government offers the most subsidy as buyers can avail Rs 5,000 per kWh, and a maximum of Rs 30,000 if the battery is bigger than 5 kWh. Here’s a list of subsidies that are offered by states on the purchase of an electric two-wheeler over and above the FAME India scheme benefits:

StateIncentive (per kWh)Max SubsidyRoad Tax Exemption (in percent)
Delhi Rs 5,000Rs 30,000100
MaharastraRs 5,000Rs 25,000100
MeghalayaRs 10,000Rs 20,000100
GujaratRs 10,000Rs 20,00050 
AssamRs 10,000Rs 20,000100
BiharRs 10,000Rs 20,000100
West Bengal Rs 10,000Rs 20,000100
RajasthanRs 2,500Rs 10,000NA
OdishaNARs 5,000100

It is interesting to note that Andhra Pradesh, Karnataka, Madhya Pradesh, Telangana, Tamil Nadu, Uttarakhand, Punjab and Uttar Pradesh do not offer any additional incentives to buyers but however, extend the 100 percent road tax exemption benefit to owners.

The mathematics also changes when it comes to electric cars (such as the Tata Nexon EV) in which states over subsidy per kWh with varying maximum subsidy limits. Mumbai offers the most incentives to buyers upon purchase of an EV by offering up to Rs 2.5 lakh in max subsidy (at the rate of Rs 5,000 per kWh) and 100 percent road tax exemption. Other states offer up to Rs 1.5 lakh of max subsidy (at the rate of Rs 10,000 per kWh). Rajasthan, Andhra Pradesh, Karnataka, Madhya Pradesh, Telangana, Tamil Nadu, Uttarakhand, Punjab and Uttar Pradesh do not offer direct incentives to buyers but offers road tax exemption to varying levels.