Parliamentary Committee Recommends Measures to Boost EV Adoption in India
The Ministry of Heavy Industries (MHI) has received suggestions to broaden the scope of FAME-II and extend its tenure to promote electric mobility.
December 22, 2023. By Abha Rustagi
Topping the list is the proposal to extend the FAME-II (Faster Adoption and Manufacturing of Electric Vehicles) scheme by three years. The committee emphasized the inclusion of private four-wheelers and quadricycles in the scheme, along with mandating EVs in public transport, logistics, and delivery sectors.
"The Committee notes that the initial targets were revised by bringing down the number of vehicles to be supported under the FAME-II Scheme. The Committee is of the opinion that in order to facilitate the transition momentum to Electric Mobility, more number of electric vehicles need to be supported and, therefore recommends that the Ministry should broaden the scope and extend the FAME-II Scheme for at least 3 more years in consultation with the Industry stakeholders to make the Scheme more inclusive," said the Parliamentary Report.
The Ministry of Heavy Industries (MHI) has received suggestions to broaden the scope of FAME-II and extend its tenure to promote electric mobility. The committee, aiming for a carbon-neutral transport sector, suggests establishing a deadline for the mandatory adoption of electric vehicles across the country.
Expressing concerns over subsidy cuts for electric two-wheelers in June, the committee urged the restoration of these subsidies. Additionally, it addressed the issue of high ownership costs, recommending a reduction in the goods and services tax (GST) to alleviate this financial burden.
To encourage the widespread use of electric vehicles, the committee proposed exploring the possibility of lowering the GST on lithium-ion batteries. It stressed the need to address GST concerns for manufacturers as well to reduce overall costs.
A notable recommendation includes a feasibility study on battery standardization and the formulation of a stable battery swapping policy by the MHI. This initiative aims to boost customer confidence and attract foreign direct investment in the sector.
Recognizing the importance of environmental decarbonization, the committee underscored the necessity of establishing solar-powered EV charging stations. The report also addressed financing challenges, suggesting the inclusion of EVs under the Priority Sector Lending (PSL) category until the targeted 30 percent penetration by 2030 is achieved, aligning with India's commitment to net-zero emissions.
One significant concern highlighted in the report is the impact of frequent policy alterations on market uncertainty and industry growth. To address this, the committee strongly recommended the establishment of a stable policy framework, emphasizing its crucial role in fostering a conducive environment for the growth of electric mobility initiatives.
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