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India’s new E-Vehicle Policy

Government Approves E-Vehicle Policy
In a major step towards promoting India as a manufacturing hub for EVs, the Indian government on 15th March 2024, approved the E-Vehicle policy.
The world is witnessing a significant shift towards electric vehicles (EVs) as a sustainable alternative to fossil fuel-powered vehicles. Governments and automotive manufacturers across the globe are increasingly investing in EV technology to reduce carbon emissions, improve air quality, and combat climate change.
What is the E-Vehicle Policy?
The Electric Vehicle (EV) policy of India, as defined by the Union Government, is a strategic scheme aimed at promoting the country as a prime destination for the manufacturing of electric vehicles in India.
The policy’s intent is to attract significant investments in India from globally recognized EV manufacturers, thereby enabling the production of EVs with cutting-edge technology within India.
The EV ecosystem through the encouragement of robust competition among EV manufacturers, will lead to increased production volumes and economies of scale.
The anticipated outcomes are reduction in production costs of EV’s in India, a decrease in India’s crude oil imports bill, an improvement in the India’s trade deficit, and environmental benefits such as reduced air pollution, which in turn will positively affect public health and the environment.
Why Was the E-Vehicle Policy Introduced?
The introduction of the India’s E-Vehicle Policy is driven by several pressing concerns. India heavily relies on crude oil imports to meet its transportation fuel needs, leading to a significant trade deficit and exposure to global oil price fluctuations.
Moreover, the increasing number of fossil fuel-powered vehicles has contributed to alarming levels of air pollution in Indian cities, posing serious health risks to the population.
The global trend towards electrification of transportation and India’s commitment to sustainable development have further necessitated the shift towards EVs.
How will the E-Vehicle Policy Benefit India?
The E-Vehicle Policy holds immense potential to benefit India in multiple ways.
- By attracting global EV manufacturers, the policy is expected to lead to high volume production of EVs in the country. This, in turn, will result in economies of scale and lower cost of production, making EVs more affordable for Indian consumers.
- The increased adoption of EVs will significantly reduce air pollution in cities, leading to positive impacts on public health and the environment.
- Additionally, the growth of the EV industry will create new job opportunities and contribute to India’s economic growth.
What Are the Key Features of the E-Vehicle Policy?
Minimum Investment required: Rs 4150 Cr (∼USD 500 Mn): To avail the benifits of India’s new EV Policy a manufacturer have to invest minimum USD 500 Mn, there are no limit on maximum Investment.
Manufacturing Timeline: 3 years to set up manufacturing facilities in India and start commercial production of EVs
In return the policy offers incentives to EV manufacturers, such as tax breaks and subsidies, to encourage investments in the sector.
Global EV Trends and India’s Position
The global EV market has experienced significant growth, with electric car sales exceeding 10 million in 2022, which is a 55% increase relative to 2021. This growth occurred despite a 3% dip in total car sales compared to the previous year.
China has been at the forefront of this surge, contributing substantially to the increase in electric car sales.
Additionally, As per data the market share of electric vehicles within passenger car sales globally rose to 14% in 2022, 8.7% in 2021, up from 4.2% in 2020.
India is still in the early stages of EV adoption. The country’s large population, growing middle class, and increasing environmental consciousness present a huge opportunity for EV manufacturers. But, India also faces several challenges such as inadequate charging infrastructure, high upfront costs of EVs, and limited domestic manufacturing capabilities.

Future Prospects of Electric Vehicles in India
The future of electric vehicles in India looks promising, with the government’s supportive policies and increasing consumer interest in EVs.
Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME) scheme aim to achieve sales penetration of 30% for private cars, 70% for commercial vehicles, and 80% for two and three-wheelers by 2030, which lays a solid foundation for the EV market’s expansion in India.
To achieve these goal, India needs to focus on developing a robust charging infrastructure, incentivizing local manufacturing of EV components, and investing in research and development to improve EV technology. Collaboration between the government, industry stakeholders, and academia will be crucial in overcoming the challenges and realizing the full potential of EVs in India.
Final Thoughts
The Indian government’s approval of the E-Vehicle Policy aims for promoting India as a manufacturing hub for EVs and attracting global investments. The policy’s focus on providing access to the latest EV technologies in India by inviting global EV players in the Indian EV ecosystem. Ev’s will have far-reaching benefits for India’s economy, public health, and the fight against climate change.