Under India’s EV mission, the country aims to incentivise electric vehicles as an alternative to fossil fuels in transportation
Schemes promoting electric mobility (e mobility) in India have got a renewed push in the Union Budget 2025-26 with a funding increase of over 20% compared to last year.
Collective allocation for such schemes has risen from Rs 4,434.92 crore in 2024-25 (revised estimates: RE) to Rs 5,322 crore in the latest Budget (Budget estimates: BE). Programmes under the umbrella term e-mobility include four major schemes with an aim to make road transport more sustainable by replacing fossil fuels and by encouraging the manufacture of electric vehicles and related components in India.
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Funding for the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Scheme, a two year scheme started in September 2024 to support various kinds of electric vehicles and public charging stations, has increased by over 114% to Rs 4,000 crore in FY26(BE).
The Scheme to Promote Manufacturing of Electric Passenger Cars in India (SMEC), which was started in 2024 to encourage adoption and manufacturing of EVs, doubled in FY26 to Rs 12 crore from Rs 6.16 crore in FY25 (RE). SMEC was also started with the objective of making India’s EV manufacturing industry globally competitive and for generating employment opportunities in the sector.
The PM-eBus Sewa Scheme, with a focus on pushing electric bus operations, rose from Rs 500 crore in FY25 (RE) to Rs 1310 crore in FY26 (BE).
Funding for the Scheme for Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicle in India – (FAME – India) declined in FY25 (RE) to Rs 2,058 crore from about Rs 4,000 crore in FY24. Under this scheme the government incentivised the purchase of electric vehicles and focussed on setting up necessary charging facilities for EVs. Phase II of the scheme, which originally began in 2015, is now operational. The latest budget has not allocated any provision for the scheme for FY26.
An additional Electric Mobility Promotion Scheme, which offered subsidies for advanced battery fitted EVs, had an outlay of Rs 500 crore for about 4 months until July 2024, has no allocation listed for it in the latest Union Budget 2025-26.
Table 1: The table shows the actual expenditure and budget for various e-mobility schemes since 2022-23.
Under India’s EV (electric vehicle) mission, the country aims to incentivise electric vehicles as an alternative to fossil fuels in transportation. Emissions from road transport constitute about 75% of all the emissions from the transport sector.
The government intends to achieve a 30% EV penetration target in the automobile market by 2030 and significant self-reliance in research and development in the field by 2047 under the Viksit Bharat Initiative. As part of the National Electric Mobility Plan 2020 the government had set a sales target of 6-7 million EV vehicle every year since 2020. A production linked incentive scheme and the Green hydrogen mission is set up to help incentivise manufacturing of fuel cells, batteries and storage systems.
Published – February 01, 2025 02:25 pm IST