India: Electric Vehicles ‘In The Fast Lane' In India

Last Updated: 20 August 2019
Article by Ashima Obhan and Vrinda Patodia

Monday, July 29th, 2019, marked the earliest Earth Overshoot Day that mankind has seen. 209 days into the calendar year and we have used up all the resources the Earth could regenerate in 365 days. Earth Overshoot Day is the date when humanity’s annual demand on nature exceeds what Earth’s ecosystems can regenerate in that year. This date has crept up by two months over the last 20 years. At this rate, it would take 1.75 Earths to sustainably meet the current demands of humanity, according to the available data.

Human beings have consistently tried to improve the process of travel – getting from one place to another quickly, comfortably and efficiently. In light of these global environmental changes, electrically-powered vehicles have become more prevalent in our society. One of the primary reasons for the introduction of electric vehicles into the market is the concern over greenhouse gas emissions that conventional automobiles emit and their contribution to global warming. Electric Vehicles produce zero emissions and are predicted to be the next disruptive market force for transportation and technology.

Electric Mobility in India

In 2019, Finance Minister Nirmala Sitharaman said in her budget speech that India wants to become a “global hub of manufacturing of electric vehicles”. The Economic Survey, a government forecast, released a day before the budget envisaged an Indian city possibly emerging as the “Detroit of electric vehicles” in the future.

With the present government providing incentives to the Electric Vehicle Industry and encouraging both manufactures and consumers to adopt electric vehicles, India's drive towards Electric Vehicles led mobility has accelerated in recent years. The union government has been trying to encourage adoption of electric mobility through a number of policy initiatives. One such scheme is the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles Scheme or better known as the FAME Scheme.

FAME Scheme

On April 1, 2019, Phase II of the FAME Scheme came into force. The FAME India Scheme promotes manufacturing of electric and hybrid vehicle technology and aims to ensure sustainable growth of the same. Fiscal incentives to promote Electric Vehicles, in the form of FAME Phase I, were launched in 2015 for a period of two years. These were later extended up to March, 2019. With its outlay of Rs 450 crore during the last four years, FAME I helped about 2.63 lakh electric/hybrid vehicles, including 1.4 lakh two-wheelers (E-2W) and 1.01 lakh four-wheelers (E-4W)1.

FAME II is India’s second phase of the FAME scheme which has been launched with an outlay of INR 10,000 Crore which would be invested over a period of 3 (three) years. Under FAME II, funds have been allocated to buses (only electric vehicle technology), four wheelers (electric, plug in hybrid and strong hybrid), three wheelers (electric) including e-rickshaws and electric two wheelers, all of which shall be eligible for incentives provided under FAME II.

What is interesting to note is that while globally car makers have been focusing on electric cars in the premium segment (costing over ₹10 lakh), India is targeting smaller vehicles. The reason for this is, according to NITI Aayog, a government think-tank, 79% of vehicles on Indian roads are two-wheelers, while three-wheelers and cars costing less than ₹10 lakh account for 4% and 12% of the vehicle population, respectively2.

Union Budget 2019 Incentives

In her maiden budget, finance minister Nirmala Sitharaman announced several incentives and subsidies to the Electric Vehicle Industry. Income tax rebates of up to ₹1.5 lakh were offered to customers on interest paid on loans to buy electric vehicles, with a total exemption benefit of ₹2.5 lakh over the entire loan period. To further incentivise e-mobility, the Budget provides that customs duty shall be exempted on lithium–ion cells, i.e. Nil duty shall be chargeable on the import of lithium-ion batteries in India, with the aim of reducing the cost of EVs, as they are not produced locally. Furthermore, makers of components such as solar electric charging infrastructure and lithium storage batteries and other components will be offered investment linked income tax exemptions under Section 35 AD of the Income Tax Act, 1961 (Deduction in Respect of Expenditure On Specified Business), and other indirect tax benefits to the manufacturers of lithium storage batteries and other ancillary components.

Another push by the Central Government toward Electric Vehicles is the recent goods and service tax (GST) cut on electric vehicles from 12% to 5% on July 27th, 2019. On the other hand a base rate of 28% GST is levied petrol and diesel vehicles. GST on chargers for e-vehicles was also reduced from 18% to 5%.

State Government Incentives

Several state governments have in line with the central government schemes, incentives and subsidies released Electric Vehicle Policies in their respective states. State governments are trying to promote local manufacturing of Electric Vehicle components. Electric bus manufacturers like Ashok Leyland, Goldstone Infratech, Tata Motors, JBM-Solaris, BYD are also all working with various state governments to electrify our public transport and electric buses are already running in cities such as Delhi, Lucknow, Dehradun, Manali and Kolkata on a trial basis.


While India’s drive towards e-mobility and electric vehicles is definitely in the fast lane, in an indication that mass adoption of Electric Vehicles in India is still some years away, a shareholder of Mahindra and Mahindra, asked managing director Pawan Goenka when the company will venture into or launch electric vehicles. Mahindra and Mahindra at that time was and still is India’s largest electric vehicle manufacturer.

Electric Vehicles is what our future seems to be heading towards. However, having said that there is little possibility that EVs will ever completely overshadow conventional vehicles which will always stay in style due to their history. Electric Vehicle are here to stay, yet how green is this transition for India or any other developing country?

No doubt, Indian cities would be better off without the exhaust fumes of internal combustion engines. However, electricity generation causes its own pollution, particularly in India, which depends largely on coal-fired plants for the purpose. What your Electric Vehicle saves by way of carbon containment, your power source could negate. So the harm done to our air by automobiles would then be done by power plants, which would need to add capacity to meet the higher demand for electricity3. Without a parallel push towards green methods of power generation to charge Electric Vehicles, the gains from lower vehicular pollution may be offset.

Another major hurdle to overcome is creating the recycling infrastructure for used Li-Ion batteries (used in electric vehicles), which have an estimated life of five to ten years. This is something even developed nations are struggling with.





The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Obhan & Associates
S.S. Rana & Co. Advocates
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Obhan & Associates
S.S. Rana & Co. Advocates
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions