Modi government to finalize FAME 3 scheme within 2 months
What's the story
The Indian government is on the verge of finalizing, the third phase of the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme.
This was revealed by HD Kumaraswamy, Union Minister of Heavy Industries, at ASSOCHAM's National Conference on Electric Mobility.
He stated that "several suggestions are coming for FAME 3," including those from the Prime Minister's Office.
The minister expects the scheme to be approved within one or two months.
Budget allocation
Proposed budget and potential incentives under FAME 3
The government is reportedly considering a budget of ₹11,500 crore for the FAME 3 scheme.
This information was shared by sources with CNBC-TV18 earlier this month.
The proposed plan may involve staggering or reducing incentives across various categories over a two-year period.
The new scheme is expected to include incentives for electric buses, three-wheelers, two-wheelers, and possibly new categories like electric trucks, tractors, mining equipment, and charging infrastructure.
Scheme extension
Extension and budget increase for FAME 2
Kumaraswamy had previously announced that subsidies under FAME 2 would be offered for e-vehicles sold until March 31, 2024, or until the funds are exhausted.
The budget for this program was increased from ₹10,000 crore to ₹11,500 crore.
However, in the interim budget presented in February 2024, the Centre reduced the allocation for the FAME scheme by nearly 44% to ₹2,671 crore for FY25.
Market growth
EV sales in India projected to surge
According to a report by Counterpoint Research, electric vehicle (EV) sales in India are expected to surge by 66% this year.
This increase is attributed to state subsidies and the development of supporting infrastructure.
The research suggests that by the end of 2024, EVs will constitute around 4% of the total passenger vehicle market in India.