India has one of the world’s most ambitious EV programmes on paper. It also has one of the world’s largest and most politically connected oil sectors. The question of which force wins this decade will determine the country’s energy — and economic — future.

In August 2025, NITI Aayog released a landmark policy proposal. Rather than relying on purchase subsidies to drive EV adoption, it recommended a shift to mandates and disincentives — compelling automakers to hit EV sales targets, and penalising high-emission vehicles. It was bold. It was directional. And it landed in a country where the oil sector employs millions, where state-owned refiners have invested hundreds of billions in petroleum infrastructure, and where the political economy of fuel pricing has brought down governments.

The question India’s energy industry is quietly — and sometimes loudly — asking: can EV policy in India withstand the weight of the oil establishment?

This is not a conspiracy theory. It is a structural question about political economy. And this August in Hyderabad, India’s leading energy experts will debate it directly.

The Policy Architecture: Ambitious, But Fragile

India’s EV policy framework, viewed on its own terms, is genuinely impressive.

The FAME-II scheme — Faster Adoption and Manufacturing of Electric Vehicles — deployed ₹11,500 crore to subsidise EV purchases and build charging infrastructure, supporting over 16 lakh electric vehicles by June 2025. Its successor, PM-E-DRIVE, launched in March 2024, targets electric buses and trucks with a more strategic, outcome-oriented approach. GST on EVs has been cut from 12% to 5%. GST on EV chargers has been reduced from 18% to 5%. Import duties on lithium-ion batteries have been lowered. Twenty-five states have notified their own EV policies, with Maharashtra, Karnataka, and Madhya Pradesh updating theirs as recently as 2025.

On paper, this is a government that has made its choice.

But Indian policy observers know that ambition on paper and implementation on the ground are two different things. The FAME-II scheme faced criticism for its complex eligibility norms, delayed subsidy disbursements, and sudden changes in localisation requirements that disrupted manufacturers’ planning. When the government abruptly reduced FAME-II subsidies for electric two-wheelers in mid-2023, several companies saw sales drop sharply within weeks. The inconsistency shook investor confidence precisely when the sector needed stability to scale.

Policy that is subject to sudden revision — for fiscal, political, or bureaucratic reasons — cannot anchor the kind of long-term capital investment that a genuine energy transition requires. Building a battery gigafactory or a charging network across 500 cities requires a decade-long policy horizon, not a two-year subsidy cycle.

The Oil Establishment: Too Big to Ignore

To understand the challenge EV policy faces, it is necessary to understand what it is up against.

India’s oil sector is not a relic industry in managed decline. It is a growing, politically powerful, economically central pillar of the Indian economy.

India’s total oil refining capacity has grown to 258.1 million metric tonnes per annum as of FY25 — making the country one of the largest refining hubs in Asia. State-owned giants — Indian Oil Corporation, Bharat Petroleum Corporation (BPCL), and Hindustan Petroleum Corporation (HPCL) — have made combined investments running into hundreds of thousands of crores in refinery capacity, pipelines, storage infrastructure, and distribution networks. Reliance Industries, the country’s largest private company by revenues, has deepened its petrochemical integration to maximise the value extracted from petroleum.

These are not companies that are quietly winding down. They are companies that are investing, expanding, and diversifying — precisely because they see India’s petroleum demand continuing to grow for at least another decade.

The employment dimension is equally important. India’s oil sector — from refineries and petrochemical plants to the 82,000 petrol pump operators and their millions of employees, to the trucking and logistics ecosystem that runs almost entirely on diesel — supports a vast and politically significant workforce. Any policy that accelerates the decline of petroleum demand is, implicitly, a policy that affects these livelihoods.

This does not mean EV policy must bow to oil sector interests. But it does mean that any honest analysis of EV policy’s prospects must account for the structural weight of the interests it is navigating around.

Where the Tension Plays Out

The conflict between India’s EV ambitions and its oil sector reality is not primarily fought in the open. It plays out in specific, consequential policy decisions.

Fuel taxation. Petrol and diesel are among the most heavily taxed commodities in India — a major source of revenue for both central and state governments. In FY24, the central government collected over ₹3 lakh crore in excise duties on petroleum products. State VAT on fuel adds substantially to this. Any scenario in which EV adoption significantly reduces petroleum consumption is also a scenario in which this revenue stream shrinks — creating a fiscal incentive, at both the central and state level, to not accelerate the EV transition too aggressively.

Charging infrastructure vs. petrol pump interests. The 82,000 petrol pump operators in India represent a politically organised constituency. As EV charging networks expand — with pumps operated by energy companies, startups, and even property developers — the business model of the traditional petrol pump faces long-term disruption. The political management of this transition is delicate.

Subsidy priorities. India maintains significant subsidies on LPG for cooking fuel, and has, at various points, subsidised petrol and diesel for specific sectors. The allocation of finite fiscal resources between sustaining petroleum subsidies and building EV incentives is a live policy tension.

Corporate lobbying. Oil marketing companies and petrochemical majors have significant access to policymakers — through industry bodies, regulatory processes, and direct engagement. Their voice in shaping the pace and design of EV policy is real, even if it is rarely discussed publicly.

The Case That EV Policy Can Survive — and Win

None of this is to suggest that India’s EV transition is being blocked. The evidence, in fact, suggests that EV policy is advancing — slower than idealists would like, but faster than sceptics expected.

Several structural forces are working in EV policy’s favour, regardless of lobbying pressures.

Economics. The running cost advantage of EVs — approximately ₹1 per kilometre versus ₹8-10 for petrol — is so large that it is driving adoption even without subsidies in high-mileage segments. Commercial fleet operators are increasingly choosing EVs not because of government mandates but because the numbers work. This organic, market-driven adoption is harder to reverse than subsidy-dependent growth.

The oil import imperative. India’s $132 billion annual oil import bill creates a strategic compulsion to reduce petroleum dependence that transcends any single industry’s lobbying interests. The Finance Ministry, the Ministry of External Affairs, and the Prime Minister’s Office all have strong reasons to want oil dependency reduced — and EV policy is a primary lever.

Global pressure. India’s Paris Agreement commitments — net zero by 2070, 45% reduction in emissions intensity by 2030 — create external accountability that constrains the government’s room to abandon clean energy policy, regardless of domestic lobbying.

The oil sector’s own pivot. Notably, India’s major oil companies are not simply defending the status quo. IOCL, BPCL, and HPCL are all investing in EV charging infrastructure, renewable energy, and green hydrogen. They are hedging, diversifying, and, in some cases, genuinely transforming. The boundary between the “oil lobby” and the “clean energy sector” is blurring in ways that create new political alignments.

What August’s Debate Needs to Answer

When India’s energy leaders gather in Hyderabad this August, several questions need honest answers.

Can India design EV policy that is stable enough over a 10-year horizon to anchor the investments that manufacturers and infrastructure developers need to make? How does India manage the fiscal revenue implications of reduced petroleum consumption — and is there a realistic transition plan for petrol pump operators and oil sector workers? What role should oil companies play in India’s energy transition — as adversaries to be overcome, or partners to be recruited? And how does India sequence its transition so that rural and lower-income communities — who benefit least from early EV adoption — are not left behind?

These are not simple questions. They are the questions that determine whether India’s EV ambition becomes a genuine energy transition or a policy aspiration that stalls against structural reality.

The debate this August at the India Energy Summit & Expo 2026 will not resolve all of these questions. But it will bring together, in one room, the policymakers designing the frameworks, the industry leaders investing within them, and the technology innovators pushing the boundaries — giving India the best possible chance of getting the answers right.

EV policy has survived its first decade in India. Whether it scales to the next level will be decided by the conversations happening right now.

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