India's Path to Electrification: Government Initiatives and Policies
India plays a significant role in the world's pollution and carbon emission landscape. India has ranked 8th in the global list of countries with the most hazardous air quality and hosts 12 of the 15 most polluted cities from Central and South Asia.
Therefore, India needs to change its perspective and focus more on reducing carbon emissions. The automotive industry in India is a significant contributor to climate change. However, 15% of global CO2 emissions come from the automotive industry.
Therefore, India has been committing to cut its emissions to net zero by 2070, with emissions intensity expected to be reduced by 45% by 2030 from the 2005 levels.
To achieve these figures, India has been planning well by introducing EV policies and regulations in India. The transport sector has been a significant pollution emitter in India; it raises questions on how fast India can implement and execute the adoption ofby replacing traditional internal combustion engine vehicles to promote clean energy transportation in India.
To boost the electric vehicle penetration, Indian citizens welcome the new change, and the penetration so far has been 1.6% of total sales in the country. However, multiple things on the manufacturing side need to be done by the Indian government to promote the adoption of electric vehicles and ease the manufacturing and building of the required electric vehicle charging network across the country.
This blog explores the Indian government's green initiatives for electric vehicles, electric vehicle subsidies, and electric vehicle incentives in India.
Indian Government Green Initiatives for Electric Vehicles
The Indian government has demonstrated a phenomenal commitment to establishing itself as an electric vehicle industry leader worldwide.
It’s been possible due to the introduction of multiple government schemes and policies that support manufacturing units, original equipment manufacturers (OEMs), and charging networks.
However, electric vehicles are relatively new to the market and need research and development to build sustainable, economical, and environmentally-free vehicles; therefore, the government has also introduced initiatives that support R&D.
All these initiatives are being implemented because the government looks forward to decreasing oil imports and reducing tailpipe emissions.
The government is also promoting the installation of EV charging stations – an essential part of electric vehicles' success – by providing capital subsidies through the FAME India Programme Phase II.
The following are the Indian government's green initiatives and policies.
- PLI SCHEME,
- Battery Switching Policy,
- Special Electric Mobility Zone
- Tax Reduction on EVs
India has been investing heavily in reducing the use of gasoline and diesel vehicles. As a result, India introduced the FAME project on April 1, 2015.
The following four main areas that FAME promotes to grow.
- Technological development
- Charging infrastructure
- Demand for technology
- Pilot projects
After four years, India launched FAME II with a whooping 10k crore budget. The FAME II project mainly supports and promotes 500,000 electric three-wheelers (E3Ws), 7,000 electric buses, 55,000 electric passenger vehicles, and a million electric two-wheelers (E2Ws).
The FAME II was supposed to expire in 2022, but the Indian government extended the project until March 31, 2024.
- The Production-Linked Incentive (PLI) Scheme aims to boost the manufacturing productivity of electric vehicles (EVs) and promote competitive pricing for EVs.
- The scheme significantly affects India's electronics sector and overall EV industry growth.
- EV manufacturers benefit from direct subsidies, including support for cell battery and vehicle component industries.
- The PLI scheme offers a total payout of INR 18,100 crore disbursed over five years, with strict eligibility criteria for manufacturing plants.
- Revising existing standards is essential to address challenges and benefit the EV ecosystem, especially for small and medium-sized enterprises in EV battery and auto parts production.
Battery Swapping Policy
- The Battery Swapping Policy standardizes EV battery specifications in India.
- The policy promotes EV adoption in time-sensitive sectors like delivery and intercity transportation.
- Battery swapping is a practical alternative to on-the-spot recharging, saving time.
- Standardized battery configurations reduce concerns about compatibility in EVs.
- Battery swapping is expected to gain acceptance in two-wheelers and three-wheelers, enhancing market penetration and benefiting manufacturers.
Duty Reduction On Electric Vehicles
Custom duty has been a significant setback for the automotive industry's growth. However, the Indian government has done great work on reducing custom duties on several essential materials and motor parts.
The following are the custom-duty changes in the materials and motor parts.
- Customs duties on nickel ore were reduced from 5% to 0%.
- Customs duties on nickel oxide reduced from 10% to 0%.
- Customs duties on ferro nickel reduced from 15% to 2.5%.
- Customs duties on motor parts were reduced from 10% to 7.5% to lower EV costs.
Special E-Mobility Zone
Some European countries and China have been implementing a unique strategy to make a special e-mobility zone that allows electric vehicles to operate in that zone.
These zones help us reduce overcrowding caused by private automobiles. However, individuals traveling through this zone must drive their own or public EV transport.
The Indian government has taken significant steps to promote and support the adoption of electric vehicles through comprehensive government initiatives and schemes. Also, making all government vehicles electric by 2030 shows the government’s approach to reducing the use of gasoline-powered vehicles and their emissions.