Alternative fuel vehicles may get subsidy thrust

Source: The post is based on the article “Alternative fuel vehicles may get subsidy thrust” published in “Business Standard” on 7th October 2023

What is the News?

Government of India has initiated work on the third phase of the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India(FAME-III).

It is planning to incorporate vehicles powered by alternative sources such as hydrogen and biofuels in the FAME-III.

What is Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME) Scheme?

The FAME India Scheme is being implemented by the Ministry of Heavy Industries.

The main objective of the scheme is to encourage Faster adoption of Electric and hybrid vehicles by way of offering upfront Incentive on purchase of Electric vehicles and also by way of establishing a necessary charging Infrastructure for electric vehicles. 

Currently, the government provides subsidies under the FAME scheme for battery electric vehicles(BEVs) and strong hybrids.

The initial two phases of the FAME scheme played a significant role in promoting the growth of electric vehicles (EVs) within the country, helping to achieve a 6 per cent market share for EVs.

Till date, the scheme has provided support to more than 1 million vehicles.

What are the plans for the third phase of the FAME Scheme?

The Government of India is planning to incorporate vehicles powered by alternative sources such as hydrogen and biofuels in the third phase of FAME.

The objective behind this is to shift away from conventional polluting vehicles and the incentive for alternative fuels aims to encourage the transition from internal combustion engine (ICE) to cleaner technology.

Moreover, similar to the current phase, incentives will be extended to vehicles sold in all categories including two-wheelers, three- wheelers, four-wheelers, and buses.The proposal also includes adding trucks to the list of vehicles.