India Formally Proposes Incentives For Electric Vehicles

The Indian government has formally proposed amendments to the country’s transport regulations to include incentives for electric vehicles. 

EV charging image from Pexels

The Ministry of Road Transport and Highways has proposed an amendment to the Central Motor Vehicles Rules to allow exemption of registration fees for electric vehicles. As per the proposed amendment, electric two-, three-, and four-wheelers shall be exempt from registration and renewal of registration fees. The exemption has been proposed only for electric vehicles, and hybrid vehicles will not be covered under the current proposed amendment.

Various media reports claim that the government has also proposed exemption of road tax for electric vehicles. While this would be welcome move to promote electric vehicles, especially cars, it is not likely make private cars attractive enough compared to conventional ICE-powered cars, an automotive blog notes.

CarDekho claims that even though road tax levied on Indian cars can be as much as 20% of the cost of the car, its exemption would still bring the cost of an electric hatchback similar to that of a mini SUV.

Further, the government may also soon consider lowering the tax on electric vehicles. The Minister of State for Finance recently informed the Indian Parliament that the government will consult with all the states to reduce the Goods & Services Tax on electric vehicles. 

Apart from these incentives, the government already offers financial subsidy on the purchase of electric vehicles under the Faster Adoption and Manufacturing of Hybrid & Electric Vehicles in India or the FAME-II scheme. The government has set aside US$1.4 billion to provide subsidies on purchase of electric vehicles. The government has already disbursed around US$50 million to buyers of two-, three-, and four-wheelers and has offered various states US$360 million for procurement of 5,000 electric buses.

Some other incentives aimed at swift adoption of electric vehicles that could be introduced and have reportedly been discussed in the recent past include discounts in insurance premiums, free parking and incentives on manufacture and import of essential parts for electric vehicles.

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