The Central government on Tuesday said that India's electric vehicle (EV) policy is designed to extend far beyond purchase incentives, combining financial support for consumers with structural reforms aimed at building a robust domestic manufacturing ecosystem, promoting
advanced technologies, and accelerating the country's transition to sustainable transportation.
In a written reply to a question in the Lok Sabha, Minister of State for Heavy Industries Bhupathiraju Srinivasa Varma said the government's strategy addresses both the demand and supply sides of the EV industry, ensuring that growth in electric mobility is supported by a strong manufacturing base and increased domestic value addition.
"While demand-side schemes like FAME-II and PM E-DRIVE focus on reducing the upfront cost of electric vehicles for consumers, the institutional framework is strengthened through supply-side Production Linked Incentive (PLI) schemes for the automobile and Advanced Chemistry Cell (ACC) sectors, which mandate high technology adoption and Domestic Value Addition (DVA)," the Minister said.
He added that the Phased Manufacturing Programme (PMP) serves as a long-term roadmap for the localization of electric vehicle production by encouraging the gradual domestic manufacturing of critical EV components. According to the government, this strategy is expected to reduce dependence on imports, strengthen local supply chains, generate employment, and improve India's competitiveness in the global electric mobility market.
The Centre emphasized that India's transition to clean mobility is being backed by substantial public investment aimed at both expanding consumer adoption and boosting manufacturing capabilities.
According to the Minister's reply, the Faster Adoption and Manufacturing of Electric Vehicles (FAME-II) scheme concluded with a total financial outlay of ₹11,500 crore, helping make electric vehicles more affordable through demand incentives and supporting the development of charging infrastructure across the country.
Building on that initiative, the government has launched the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) scheme with a budget allocation of ₹10,900 crore. The new programme aims to further accelerate EV adoption by continuing financial support while encouraging wider deployment of electric mobility solutions.
On the manufacturing front, the government has introduced large-scale incentive programmes to strengthen India's EV production ecosystem. The Production Linked Incentive (PLI) Scheme for Automobile and Auto Components has been allocated ₹25,938 crore, encouraging manufacturers to invest in advanced automotive technologies and increase domestic production.
Similarly, the PLI Scheme for Advanced Chemistry Cell (ACC) Battery Storage, with an outlay of ₹18,100 crore, seeks to establish a strong domestic battery manufacturing industry. Since batteries account for a significant share of EV costs, expanding local production is expected to improve affordability, reduce import dependence, and enhance energy security.
Responding to whether the government's new policy framework represents a more comprehensive approach to electric mobility, Varma replied in the affirmative. "Yes, the new policies are comprehensive. They address demand as well as the supply side of manufacturing of EVs," he said.
At the same time, the government clarified that it has not set a specific numerical target for the number of electric vehicles expected to be on Indian roads by 2047. Instead, it is focusing on creating a supportive ecosystem that encourages voluntary adoption through incentives, infrastructure development, technological innovation, and manufacturing growth.
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The Centre informed Parliament that electric mobility is currently being promoted through multiple flagship initiatives. These include FAME India Phase-II, PM E-DRIVE, the PLI schemes for automobiles and ACC battery manufacturing, the PM e-Bus Sewa-Payment Security Mechanism (PSM) with a financial outlay of ₹3,435.33 crore, and the Scheme for Promotion of Manufacturing of Electric Passenger Cars in India (SPMEPCI).
Together, these programmes aim to accelerate the adoption of electric vehicles across different segments, improve charging infrastructure, promote domestic manufacturing, and encourage technological innovation throughout the EV value chain.
The government also noted that several states have introduced their own dedicated electric vehicle policies to complement central initiatives by offering additional incentives, infrastructure support, and investment opportunities. However, it clarified that the Ministry of Heavy Industries' schemes are demand-driven, meaning funds are released based on actual demand rather than predetermined state-wise allocations.
The Centre reiterated that its multi-pronged EV policy is intended to build a sustainable and self-reliant electric mobility ecosystem by combining consumer incentives with manufacturing reforms, technological advancement, and long-term industrial development. By integrating demand stimulation with domestic production capabilities, the government aims to position India as a global hub for electric vehicle manufacturing while supporting the country's broader goals of reducing emissions, improving energy security, and achieving cleaner transportation in the years ahead.
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