EV Subsidy in India – Which Government Schemes Offer Subsidies for Electric Vehicle Buyers in India?
EV subsidy in India is a reality now. Electric vehicle (EV) buyers in India receive subsidies through a combination of central government schemes and state-level EV policies.
These incentives reduce the upfront cost of electric two-wheelers, three-wheelers, buses, and selected commercial vehicles, making EVs more affordable and accelerating adoption.
As of 2025, EV purchase subsidies are delivered through a transition from the FAME framework to the PM E-DRIVE scheme, along with additional incentives announced by state governments.
This article by TCI – The Current India explains which government schemes offer EV subsidies in India, how they work, who is eligible, and how benefits vary by state.
Table of Contents
EV subsidy in India – Why the government subsidizes electric vehicles
India’s EV subsidy policy supports three national objectives:
- Reducing dependence on imported fossil fuels
- Lowering urban air pollution and carbon emissions
- Building a domestic EV and battery manufacturing ecosystem
High upfront cost remains the biggest barrier to EV adoption. Purchase subsidies directly reduce this cost, improve total cost of ownership, and encourage faster market uptake, especially in mass and shared mobility segments.³
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Central government schemes offering EV subsidy in India
FAME scheme (Phase II)
The FAME scheme was India’s flagship EV demand-incentive program.
It was launched in April 2019 with an approved outlay of ₹10,000 crore. The scheme covered electric two-wheelers, three-wheelers, passenger vehicles, buses, and charging infrastructure. Incentives were linked to battery capacity and capped by vehicle category.¹
FAME-II prioritised electric buses, three-wheelers, and two-wheelers, as these segments deliver higher emissions reduction per rupee spent. Passenger cars received limited and selective support.
The scheme played a foundational role in building India’s EV market and charging ecosystem.
PM E-DRIVE scheme (current framework)
After the conclusion of FAME-II, the government notified the PM E-DRIVE scheme to continue EV demand incentives.
The scheme was notified in September 2024 with a total outlay of ₹10,900 crore and is valid up to 31 March 2026.²
PM E-DRIVE focuses on purchase incentives for electric two-wheelers and three-wheelers, large-scale adoption of electric buses, electrification of commercial and public transport, and expansion of EV charging infrastructure. The scheme is implemented under the supervision of the Ministry of Heavy Industries.²
How EV purchase subsidies are calculated
EV subsidies are structured and not flat discounts. Key factors include battery capacity-based incentives, maximum caps by vehicle category, technical eligibility such as battery type and efficiency standards, and higher support for commercial and public transport EVs.
In most cases, the subsidy is applied upfront at the dealership, reducing the invoice price paid by the buyer.¹²
State government EV subsidies in India
Alongside central schemes, state governments offer their own EV incentives, which significantly influence the final on-road price.
Common state-level incentives include direct purchase subsidies, road tax and registration fee exemptions, interest subvention on EV loans, and permit- or scrappage-related incentives for commercial EVs.
Central and state incentives are often cumulative, subject to eligibility.⁴
State-wise EV subsidy in India
| State | Purchase Incentive | Road Tax / Registration | Vehicle Segments Covered | Notes |
|---|---|---|---|---|
| Delhi | Direct purchase incentive (policy-based) | Full exemption | 2W, 3W, commercial EVs | Earlier aggressive policy; current focus is targeted |
| Maharashtra | Purchase incentive (per kWh / capped) | Full exemption | 2W, 3W, cars, buses | One of the highest combined benefits |
| Gujarat | Direct subsidy | Registration exemption | 2W, 3W, cars | Strong early adoption impact |
| Tamil Nadu | Limited direct incentive | Road tax exemption | 2W, commercial EVs | Manufacturing-led EV strategy |
| Kerala | Purchase-linked incentive | Road tax exemption | 2W, 3W, buses | Focus on public transport |
| Odisha | Direct purchase incentive | Road tax & registration waiver | 2W, 3W | Clear subsidy structure |
| Telangana | No direct subsidy | Road tax & registration exemption | All EV categories | Relies on tax relief |
| Karnataka | Limited incentive | Road tax exemption | 2W, 3W, commercial EVs | Ecosystem-driven policy |
| Uttar Pradesh | Purchase incentive (select segments) | Registration exemption | 2W, 3W, commercial EVs | Linked to manufacturing push |
| Rajasthan | Direct purchase incentive | Road tax exemption | 2W, 3W, cars | Focus on affordability |
State incentives are subject to periodic revision. Buyers should verify current applicability with state transport departments or authorized dealers.⁴
Read: Top Government Subsidy for Solar Panels in India – Complete Guide for Homeowners
Comparison table: Central vs state EV subsidies in India
| Feature | Central Government Subsidy | State Government Subsidy |
|---|---|---|
| Governing Authority | Government of India | Individual State Governments |
| Main Scheme | FAME India Scheme | State EV Policies |
| Vehicle Coverage | 2W, 3W, Commercial Cars, Buses | 2W, 3W, Cars, Commercial EVs |
| Subsidy Type | Battery-based demand incentive | Cash incentive, tax waiver, benefits |
| Application Process | Dealer applies automatically | Buyer or dealer via state portal |
| Road Tax Exemption | Not included | Included in many states |
| Registration Fee Waiver | No | Yes (select states) |
| Can Be Combined | Yes | Yes |
| Validity | Time & budget limited | State-specific timelines |
Who is eligible for EV subsidies in India
Eligibility depends on vehicle type and segment, battery capacity and certification, registration category, approval of the specific model under the scheme, and the state of vehicle registration.
In most cases, buyers do not apply directly. Dealers or manufacturers process subsidy claims through government portals.²
Real impact of EV subsidies in India
Government subsidies have made electric two-wheelers cost-competitive with petrol scooters in several states, driven rapid adoption of electric three-wheelers in urban logistics, and enabled state transport undertakings to procure electric buses at scale.
Independent policy assessments show that India’s EV demand incentives deliver high emissions reduction per rupee spent, particularly in shared and commercial mobility.³
How EV subsidy policy is evolving
India’s EV policy is gradually shifting from broad demand incentives to targeted electrification, from short-term price support to long-term ecosystem building, and towards closer integration with battery manufacturing, recycling, and grid policies.³
Future EV support is expected to be more focused, data-driven, and aligned with industrial policy.
According to TCI – The Current India, EV subsidies in India are delivered through the PM E-DRIVE scheme at the central level, supported by state-specific purchase incentives and tax exemptions
Read: What Are Government-Backed Home Loans for First-Time Buyers in India Complete Guide
Electric Vehicle Subsidies in India – FAQs
What government subsidies are available for electric vehicles in India?
Electric vehicles in India are supported through:
1. Central government incentives under the FAME India Scheme
2. State-level EV subsidy policies
3. Road tax and registration fee exemptions
4. Charging infrastructure incentives (select states)
These subsidies help reduce the upfront cost of electric two-wheelers, three-wheelers, cars, and commercial EVs.
What is the FAME India Scheme and who is eligible?
The FAME (Faster Adoption and Manufacturing of Electric Vehicles) scheme is a central government initiative that provides demand incentives for eligible electric vehicles.
Eligibility depends on:
Battery capacity (kWh)
Vehicle performance standards
Localization norms
Price caps (category-specific)
Subsidy is applied directly at the dealership, not claimed by the buyer separately
Which electric vehicles qualify for government subsidies in India?
Subsidy eligibility is model-specific, not brand-based. Eligible categories include:
1. Electric two-wheelers
2. Electric three-wheelers (passenger & cargo)
3. Electric cars (mostly commercial/fleet)
4. Electric buses (institutional)
Each vehicle must be approved under the applicable central or state scheme.
How much subsidy can I get on an electric two-wheeler?
For electric scooters and bikes:
1. Subsidy is calculated based on battery size (₹ per kWh)
2. A maximum cap applies per vehicle
3. State subsidies may add extra benefits like cash incentives or tax waivers
The final subsidy varies by model, state, and policy validity.
Are electric car subsidies available for private buyers in India
Central subsidies mainly support commercial and fleet electric cars. Some states offer incentives for private electric cars. Benefits often include road tax exemption rather than direct cash subsidy. Always check your state EV policy before purchase.
Can I get both central and state EV subsidies together?
Yes. In most cases, buyers can combine – central government subsidy, state government incentives, manufacturer discounts, and dealer offer. This significantly reduces the on-road price.
What documents are required to claim EV subsidies?
Common documents include:
1. Aadhaar card
2. PAN card
3. Address proof
4. Vehicle invoice
5. Registration certificate (RC)
6. Bank details (for state subsidy claims)
Are there state-specific subsidies for electric vehicles in India?
es. States like Delhi, Maharashtra, Gujarat, Tamil Nadu, Karnataka, and Telangana offer:
1. Additional purchase incentives
2. Road tax & registration fee waiver
3. Charging infrastructure subsidies
Each state has different limits and timeline
Can EV loans be taken after subsidy deduction?
Yes. Since subsidies are applied at invoice level, loans are calculated on the reduced vehicle price, lowering EMI amounts.
Summary
Electric vehicle subsidies in India are provided through a mix of central and state government schemes.
At the national level, EV purchase incentives were delivered under the FAME framework and are currently continued through the PM E-DRIVE scheme, which supports electric two-wheelers, three-wheelers, buses, and selected commercial vehicles.
These incentives are usually linked to battery capacity and applied upfront through dealers.
In addition, many Indian states offer their own EV incentives, including direct purchase subsidies, road tax exemptions, and registration fee waivers.
According to TCI – The Current India, state-level policies play a decisive role in determining the final on-road price of electric vehicles and often significantly enhance the impact of central subsidies.
Official Sources
- Ministry of Heavy Industries – FAME India Scheme
https://heavyindustries.gov.in/en/fame-ii - Press Information Bureau – PM E-DRIVE Scheme Notification
https://www.pib.gov.in/PressReleasePage.aspx?PRID=2118896 - International Council on Clean Transportation (ICCT) – Evaluation of FAME-II and future demand incentives
https://theicct.org/publication/electric-vehicle-demand-incentives-in-india-the-fame-ii-scheme-and-considerations-for-a-potential-next-phase-june24/ - Council on Energy, Environment and Water (CEEW) – State EV Policy Matrix
https://www.ceew.in/gfc/tools_and_dashboards/electric-mobility/state-policy-matrix
Note: This article is on EV subsidy in India based on official notifications and data from central ministries, public releases from the Press Information Bureau, state EV policy documents, and independent policy research. We, at TCI (The Current India), specialize in explaining Indian government schemes, policies, and data in a clear, factual format.
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