As we approach the upcoming Union Budget, India’s electric vehicle (EV) sector stands at a pivotal juncture. Over the past year, the industry has seen remarkable growth, driven by 100% FDI, new manufacturing hubs, enhanced charging infrastructure, and favorable policies and incentives. The government’s proactive stance, particularly through the production-linked incentive (PLI) scheme, has significantly boosted the manufacturing of EVs, components, and batteries.
According to a study by the Centre for Energy Finance (CEEW-CEF), the Indian EV market is poised to become a $ 206 billion opportunity by 2030. This highlights the importance of continued government support to ensure sustainable and rapid growth. The FAME II scheme was instrumental in setting the foundation for EV adoption in India. With its conclusion in March 2024, the interim EMPS scheme’s reduced subsidies have posed challenges for the industry. As a result, we are looking forward to the introduction of FAME III, which will provide subsidies comparable to FAME II, to revitalise the industry and develop charging infrastructure nationally.
Furthermore, the future budget should prioritise incentivizing firms to use EVs for last-mile delivery operations. Developing robust manufacturing capacity to fulfil expanding demand is equally important. Although progressing, India’s EV ecosystem is still in its early phases and requires a competent workforce for production and after-sales services. Large-scale upskilling and reskilling programmes are required to provide the workforce with the skills needed for this changing business. We expect that the budget will include considerable funding for these programmes, allowing India to continue to lead in the global transition to clean mobility. The government can assist unleash the full potential of the EV industry by supporting innovation and infrastructure development, which drives economic growth and environmental sustainability.
