The Narendra Modi-led government is preparing to launch the third edition of its flagship electric vehicle incentive program, Faster Adoption and Manufacturing of Electric Vehicles (FAME), with a substantial budget of approximately Rs 10,000 crore. According to media reports, the initiative is slated to roll out within the first 100 days of the new government’s tenure, starting next month.
FAME-III is set to extend financial incentives to purchasers of electric two-wheelers, three-wheelers, and government-owned buses. However, a decision on whether to include electric cars, particularly those bought by institutional buyers such as taxi aggregators, is pending.
Building upon the foundations of FAME-II, which concluded in March 2024, the proposed FAME-III scheme is poised to be presented to the Union Cabinet for approval shortly after the new government assumes office in June. FAME-II provided a 15 per cent subsidy on the sale price of electric scooters.
Furthermore, to bridge the gap until FAME-III’s implementation, the government introduced the Electric Mobility Promotion Scheme (EMPS), allocating Rs 500 crore to support the sales of electric two-wheelers and three-wheelers until July. Under EMPS, incentives have been reduced compared to FAME-II, with electric two-wheelers receiving up to Rs 10,000 and electric three-wheelers up to Rs 50,000.
Under FAME-III, new guidelines are expected, with companies seeking incentives on electric vehicle sales undergoing a revised certification process. Unlike FAME-II’s five-year validity, FAME-III is slated to initially last for two years.
While FAME-II incentivized the purchase of 7,000 electric buses, FAME-III is anticipated to expand this number, particularly providing more subsidies for electric buses bought by State Transport Undertakings (STUs).
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However, the inclusion of electric cars in FAME-III remains uncertain. Current proposals suggest subsidies may be excluded for electric cars, even for commercial use. Discussions are ongoing regarding the potential inclusion of electric cars in the scheme, with considerations also extended to hybrid cars meeting specified criteria.