India Plans FAME III Boost for Electric Vehicles
ECONOMY & POLICY

India Plans FAME III Boost for Electric Vehicles

India is gearing up to introduce the third phase of its flagship scheme aimed at promoting the adoption of electric vehicles (EVs) in the upcoming budget, slated to be presented next month. According to sources familiar with the matter, the Faster Adoption & Manufacturing of Electric Vehicles (FAME) III scheme is expected to receive a substantial budgetary allocation of approximately Rs 10,000 crore.

A senior government official revealed, "Discussions are underway, and FAME III could be announced in the full budget presentation." The Ministry of Heavy Industries, responsible for administering the scheme, has already submitted a proposal for review to the Prime Minister's Office (PMO).

The decision on implementing the scheme will be finalized closer to the budget session, taking into account the current fiscal scenario, another official stated.

FAME III aims to build on previous iterations, which have played a crucial role in supporting electric two-wheelers, three-wheelers, and four-wheelers. The scheme, initiated in 2015 with an initial budget of Rs 5,172 crore, was followed by FAME II in 2019, which received Rs 10,000 crore in funding and continued operations until March 31, 2024.

In the interim, the government introduced the Electric Mobility Promotion Scheme (EMPS) 2024, with a budget of Rs 500 crore, specifically targeting subsidies for electric two-wheelers and three-wheelers. Under EMPS, subsidies were reduced compared to FAME II, with incentives of up to Rs 10,000 per electric two-wheeler and Rs 50,000 per electric three-wheeler.

Notably, EMPS excluded subsidies for electric four-wheelers, focusing instead on supporting the sale of 333,387 electric two-wheelers and 38,828 three-wheelers. Eligibility for EMPS subsidies was limited to companies with established local manufacturing capabilities in India, diverging from FAME II's phased manufacturing program (PMP) approach.

The proposed FAME III policy is set to introduce stricter verification measures for manufacturers seeking subsidies, addressing previous concerns of misuse observed under earlier schemes. This move underscores the government's commitment to promoting green mobility and reducing dependence on fossil fuels.

As the budget presentation approaches, stakeholders in the electric vehicle sector eagerly await further details on FAME III, which is poised to shape the future landscape of electric mobility in India.

India is gearing up to introduce the third phase of its flagship scheme aimed at promoting the adoption of electric vehicles (EVs) in the upcoming budget, slated to be presented next month. According to sources familiar with the matter, the Faster Adoption & Manufacturing of Electric Vehicles (FAME) III scheme is expected to receive a substantial budgetary allocation of approximately Rs 10,000 crore. A senior government official revealed, Discussions are underway, and FAME III could be announced in the full budget presentation. The Ministry of Heavy Industries, responsible for administering the scheme, has already submitted a proposal for review to the Prime Minister's Office (PMO). The decision on implementing the scheme will be finalized closer to the budget session, taking into account the current fiscal scenario, another official stated. FAME III aims to build on previous iterations, which have played a crucial role in supporting electric two-wheelers, three-wheelers, and four-wheelers. The scheme, initiated in 2015 with an initial budget of Rs 5,172 crore, was followed by FAME II in 2019, which received Rs 10,000 crore in funding and continued operations until March 31, 2024. In the interim, the government introduced the Electric Mobility Promotion Scheme (EMPS) 2024, with a budget of Rs 500 crore, specifically targeting subsidies for electric two-wheelers and three-wheelers. Under EMPS, subsidies were reduced compared to FAME II, with incentives of up to Rs 10,000 per electric two-wheeler and Rs 50,000 per electric three-wheeler. Notably, EMPS excluded subsidies for electric four-wheelers, focusing instead on supporting the sale of 333,387 electric two-wheelers and 38,828 three-wheelers. Eligibility for EMPS subsidies was limited to companies with established local manufacturing capabilities in India, diverging from FAME II's phased manufacturing program (PMP) approach. The proposed FAME III policy is set to introduce stricter verification measures for manufacturers seeking subsidies, addressing previous concerns of misuse observed under earlier schemes. This move underscores the government's commitment to promoting green mobility and reducing dependence on fossil fuels. As the budget presentation approaches, stakeholders in the electric vehicle sector eagerly await further details on FAME III, which is poised to shape the future landscape of electric mobility in India.

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