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Government Policies & Incentiveson ev vehicles

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Government Policies & Incentives for EVs in India (2025)

India’s transition to electric vehicles (EVs) is being driven by a robust set of government policies and incentives designed to accelerate adoption, spur local manufacturing, and build a sustainable mobility ecosystem. Here’s an overview of the most significant national and state-level measures shaping the EV landscape in 2025.

National Incentive Schemes

1. FAME II (Faster Adoption and Manufacturing of Electric Vehicles)

  • Budget: ₹10,000 crore for five years starting April 2019, with a focus on supporting two-, three-, and four-wheelers, as well as electric buses.

  • Subsidy Structure: Incentives are linked to battery capacity:

    • Two-wheelers: ₹15,000/kWh (up to 40% of the vehicle cost)

    • Three-wheelers: ₹10,000/kWh (up to 5kWh)

    • Four-wheelers: ₹10,000/kWh (up to 15kWh)

    • Buses: ₹20,000/kWh (up to 250kWh)

  • Impact: Over 1.6 million EVs have received incentives, and thousands of new public charging stations have been sanctioned nationwide, outstripping early targets and creating new green jobs.e-amrit.niti+2

2. PM E-Drive Scheme

  • Scope: Replaces the FAME scheme from 2024, with an outlay of ₹10,900 crore (2024-2026).

  • Focus: Major thrust on scaling charging infrastructure (₹2,000 crore for 72,000 charging stations) and integrating advanced technologies, automated battery swapping, and buses in public transport—addressing range anxiety and the needs of urban commuters.drishtiias+1

3. Production Linked Incentive (PLI) Schemes

  • Auto and Auto Components: ₹25,938 crore for advanced automotive technology, encouraging the domestic manufacture of EVs and components.

  • Advanced Chemistry Cells (ACC): ₹18,100 crore to boost domestic battery cell manufacturing and storage, reducing reliance on imports and potentially lowering EV costs in the medium term.pib

4. Domestic Manufacturing Incentives

  • New 2024 Policy: Minimum ₹4,150 crore investment required from global manufacturers to set up EV plants in India. In return, firms can import up to 8,000 electric four-wheelers at lower customs duty for five years, provided they meet investment and domestic value addition norms. This is targeted at attracting foreign investment and positioning India as an automotive manufacturing hub.pib+1

State-Level Incentives

Nearly every Indian state now offers additional subsidies, exemption from road tax and registration fees, and special perks (such as dedicated EV parking, cheaper electricity tariffs, and priority lanes). Delhi, Telangana, and Karnataka are among the most proactive, subsidizing fleet conversions and electric public buses as part of green mobility missions.drishtiias

Infrastructure and Ecosystem Development

  • Charging Infrastructure: The government has committed large-scale grants and fiscal support for public and highway charging stations, battery swapping stations, and unified software platforms for payments and navigation.bolt+1

  • Green Jobs & Skill Development: Policies are aligned with employment generation in battery manufacturing, R&D, charging station setup, and vehicle assembly, aiming to make e-mobility an engine for future employment growth.drishtiias

Looking Ahead

With a doubling of the Union Budget allocation for automotive and EV initiatives in 2025, the Indian government is signaling its commitment to clean mobility and technological leadership. The combination of demand-side incentives, local manufacturing push, and infrastructure investments ensures that EVs will form a vital part of India’s economic and environmental future.canalys+3

These well-rounded policies are not just about increasing EV sales—they are about building a globally competitive, sustainable mobility ecosystem in India.

  1. https://e-amrit.niti.gov.in/electric-vehicle-incentives
  2. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2154129
  3. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2112237
  4. https://www.drishtiias.com/daily-updates/daily-news-editorials/india-s-shift-to-electric-vehicles
  5. https://canalys.com/insights/india-union-budget-2025-ev-growth-in-india
  6. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2133258
  7. https://www.esgtimes.in/mobility/ev/india-unveils-incentive-scheme-to-boost-domestic-electric-car-manufacturing/
  8. https://bolt.earth/blog/government-incentives-for-ev-charging-infrastructure-in-india
  9. https://niti.gov.in/sites/default/files/2025-08/Electric-Vehicles-WEB-LOW-Report.pdf
  10. https://www.canalys.com/insights/india-union-budget-2025-ev-growth-in-india
  11. https://heavyindustries.gov.in/fame-ii

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